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March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

Discussion in 'Topical Discussions (In Depth)' started by Scorpio, Mar 9, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue
    Michael Snyder

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    For more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history. Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point. The only real question is when it will happen. Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913. Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger. But of course it is not just the United States that is in this sort of predicament. At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.

    When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes. The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing. We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.

    Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy. As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.

    Corporations and households have been going into absolutely enormous amounts of debt as well. Corporate debt has approximately doubled since the last financial crisis, and U.S. consumers are now more than 12 trillion dollars in debt.

    When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent. I think that the following illustration does a pretty good job of showing how absolutely insane that is

    If your brother earns $100,000 in annual income and borrowed $10,000 on his credit card, he could consume $110,000 worth of stuff. In this example, his debt to his personal GDP is just 10%. But what if he could get more credit year after year and reached a point where his total debt reached $352,000 but his income remained the same. His personal debt-to-GDP ratio would now be 352%.

    If he could borrow at super low interest rates, maybe he could sustain the monthly loan payments. Maybe? But how much more could he possibly borrow? What lender would lend him more? And what if those low rates began to rise? How much debt can his $100,000 income cover? Essentially, he has reached the end of his own debt cycle.

    The United States is certainly not alone in this regard. When you look all over the industrialized world, you see similar triple digit debt to GDP figures.

    When this current debt super cycle ultimately ends, it is going to create economic pain on a scale that will be unlike anything that we have ever seen before. The following comes from King World News

    That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. Therefore, the question is not what could go wrong since it is guaranteed that all these liabilities will implode at some point. And when they do, it will bring misery to the world of a magnitude that no one could ever imagine. It is of course very difficult to forecast the end of a major cycle. As this is unlikely to be a mere 100-year cycle but possibly a 2000-year cycle. It is also impossible to forecast how long the decline will take. Will it be gradual like the Dark Ages, which took 500 years after the fall of the Roman Empire? Or will the fall be much faster this time due to the implosion of the biggest credit bubble in world history? The latter is more likely, especially since the bubble will become a lot bigger before it implodes.

    And there are certainly lots of signs that a global slowdown is already beginning. For example, global trade growth has fallen below 2 percent for only the third time since the year 2000. On each of the other occasions, we witnessed a horrible recession take place. For more signs that economic conditions are deteriorating, please see my previous article entitled “Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning“.

    Of course much of the globe is already in the midst of a horrible economic crisis. Brazil is in the middle of their worst recession ever, and people are literally starving in Venezuela. A new round of debt problems has erupted in Europe, with Greece, Portugal and Italy being the latest flashpoints.

    Just like in 2007, many are mocking the idea that the a major economic downturn is coming to the United States. They believe that the ridiculously high stock market valuations of today can stick around indefinitely, and they are putting their faith in politicians.

    But it won’t be too long before a new economic crisis begins in America and the kind of civil unrest that I portray in “The Beginning Of The End” erupts all across the country.

    I just don’t understand why more people cannot see this. Government debt, corporate debt and consumer debt have all been growing much, much faster than the overall economy. Can someone please explain to me how that could possibly be sustainable in the long-term?

    Someone that I considered to be a mentor but that has since passed away once said that things would seem like they would be getting better for a little while before the next crash comes.

    And it turned out that he was precisely correct. We are in a season of time when economic conditions have appeared to be getting a little bit better in the United States, and this has blinded so many people to the truth of what is about to happen to us.



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    About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog and End Of The American Dream. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*





    theeconomiccollapseblog.com

    http://www.silverbearcafe.com/private/03.17/overdue.html
     
    Flight2gold likes this.
  2. Flight2gold

    Flight2gold Silver Member Silver Miner Site Supporter ++

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    Mr. Snyder is 100% correct but they will keep plugging this sinking ship with corks till the bitter end.
    I'll think we'll see some type of transition away from the dollar as primary reserve currency before a crash.
     
  3. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    If I grow one acre of corn & you grow one acre of wheat and we trade half of our crops with each other to sustain us thru the winter did we create a profit? The answer is no.

    Now what if we both grew 1000 acres of wheat & corn but only need to trade each other a half acre to sustain ourselves thru winter, what would we do with the other 999.5 acres if we couldnt barter the over production and there was not an adequate volume of money in circulation to sell the production to the market??? We would extend the market CREDIT and receive IOU's for the product.

    Why would we extend credit? Because of the cost & losses incurred in storing the product....

    Why isnt there an adequate volume of money in the market to meet consumer demand & full payment for the product? IOU's & credit are CONTRACTS created via private transactions that require management (banks keeping score), contract enforcement & regulation (.gov to prevent cheating), both of which will receive a stipend from their activities. Preventing an adequate flow & circulation of purchasing power among the end users (consumers) enriches both the score keepers & referees, neither of which produced anything!

    The current currency regimes around the world are generating IOU's & instant credit to retain their institutions & pirating operations.... a scam that is predicated upon preventing fair market wages for labor.

    If we go back to the initial barter trade of 1/2 wheat & corn we observe that there was no profits created in the simple transaction. Labor was equal & commensurate to the production and final product.

    Thus we find that profit is essentially based upon exploiting labor at a lower cost input to output a surplus called profit. Profit is more illusion based upon frauds & deceptions that are supported & ENFORCED by the law perverted.... and we wonder why U.S.A. has the largest prison population per capita on the planet... To promote fear, to prevent labor from rising up against the iniquities of the scheme....

    Thus today it seems that the so called 100 & 2000 yr debt cycle is nonsequitor & obsolete. These cycles are based upon somewhat honest weights & measures, hence today these concepts of honest weights & measures are no longer applicable.... The producers no longer control the flotations of IOU's but like the end users have been enslaved into receiving but a fraction of their output... they like the consumer have been forcefully absorbed into the bank/.gov shake down scam of unlimited greed driven usurpations ....

    The foregoing illustrations are presented as simplistic rudimentary examples of a very complex system of exploitations called variously an "economy." See there, they even gave the usurpations & thefts by deception, fraud & illusion a name!
     
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  4. Area51

    Area51 Seeker Seeker

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    The issue runs far deeper than that, my friend.

    How many people could actually build somethings with their hands or grow something out of the dirt? Not many.

    A century ago, the majority of people lived in small farms. There was no such thing as "specialization" - - they had a mix of cows, pigs, chickens and sheep. Each farm grew their own feed for their animals along with of course the garden and fruit trees.

    That was self-sufficiency at its finest. But it's virtually impossible to control someone who's self sufficient - - let alone an entire population that's self sufficient.

    Everyone took care of themselves and if you had extra you could trade with neighbours or at the market.

    There was no real need for money.
     
  5. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    I think a couple years of poverty would fix that issue. Most people can learn to build things that would suffice and cheaply. The problem is building codes and zoning would force them to tear their own buildings down because (red pill trigger warning) they aren't expensive or taxable enough.
     

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