Debt & Deficits

The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up.

The madmen who are responsible for the coming economic disaster continue to behave as if they can manage to avoid it. Violating Einstein’s definition of insanity, they continue to apply the same poison that caused the problem. These fools believe they can manage complexities they do not understand. The end is certain, only its timing is unknown, and, once interest rates begin to rise, and they will, it's game over so it begs the questions "How much longer this can possibly go on?" and "What will happen to the U.S. and the world when it does?"

Many of the public employee pension plans run by states don’t have enough money in them to make upcoming pension payments to retired state workers. The problem has been a long time coming, but COVID-19 may make it into a crisis.

A BIS study released in June 2012 warns that budgets of most advanced economies, excluding interest payments, "would need 20 consecutive years of surpluses exceeding 2 per cent of gross domestic product – starting now – just to bring the debt-to-GDP ratio back to its pre-crisis level".

A vicious upward debt spiral is gaining momentum. The budgets of most advanced economies, excluding interest payments, need 20 consecutive years of surpluses exceeding 2% of gross domestic product – starting now – just to bring the debt-to-GDP ratio back to its pre-crisis level.

The laws of gold confiscation are very clear in the U.S.: During any time of national crisis, it becomes illegal to buy, sell, or “hoard” gold bullion in any form. It is delineated under an Executive Order and can be re-administered as quickly as the assets in your checking account can be frozen. The penalties for violation are 10 years in prison, $10,000 fine, or both. Words: 821

Warning lights are flashing. Whether it’s this year or next year, the odds of another economic downturn are high — and growing.

The value of a currency is determined by a number of variables. In this article, I will focus on the dynamics of demand, supply, current account deficits, and aggregate government debt.

This short video - on the sustainability of government spending - should be watched by everyone, including those not yet old enough to vote. It should be shown in every high school and college classroom.

Central banking makes it possible for the government to expand the money supply by any amount, at any time deemed necessary and once (hyper)inflation is publicly seen as being the lesser evil of all options available for the government meeting its debt service, it cannot be dismissed out of hand that (hyper)inflation would be the consequence of an unsustainable debt-to-GDP ratio.