Rising Debt Is a Global Problem
An article from the New York Post pointed out that many analysts are joining Peter Schiff in saying that the global debt explosion is unsustainable. In fact, it’s pushing countries around the world towards yet another precipice of financial collapse. The Post cites some grim statistics of American and global debt:
- Global debt has expanded $57 trillion since 2007, reaching a total of $199 trillion last year.
- Total US debt was $40 trillion last year, or 233% of US gross domestic product.
- Even the Atlanta Fed has cut its estimate for first-quarter GDP growth to 0.3%.
- Central banks in the eurozone adopted a $60 billion per month QE program, pushing bonds to an all-time low.
The Post quoted Peter’s warning that the upcoming financial crisis will be worse than the previous one:
The debts grow larger and larger because of our ability to postpone the consequences — and we are rapidly approaching the crisis that will dwarf the crisis in 2007 and 2008…”
This crisis won’t be limited to a select few. Anyone who owns a home or a credit card will be especially hard-hit:
The bogeyman is unsustainable debt, say analysts. The globe is overwhelmed with a ticking time bomb of debt… As the debt mountain expands, the threat of rising rates will hit various sectors especially hard, from homeowners on adjustable rates to credit-card holders, financial planners note.”
Peter points out that America’s GDP growth remains abysmal. We know that he believes it is likely to dip into negative territory as we enter a new recession. In this situation, there’s no foreseeable way for the country to pay off its debts.
It is impossible to stay ahead because there is no way GDP can ever grow as fast as the debt is growing… All the while the problems get bigger…”
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