Worldwide governments are holding more average debt than ever before in world history.
Perhaps a second perhaps even more dangerous credit crisis is to be expected.
The clock is ticking and every single second; the planet takes on more and more debt.
In 2001, global government debt totaled $18.2 trillion. Spring-forward just 10 years, and the unimaginable figure now totals almost $44 trillion! That’s an increase of 140 percent (over 9.0% a year).
On your smart phone, you can pull up an app where you can see these numbers increase as they fly by every second! That ISN’T the management of money!
According to The Economist, global sovereign debt is predicted to climb an additional 7% in 2012 to reach an historical high of $47 trillion.
Calculating debt against gross domestic product (GDP), the global debt-to-GDP ratio at the end of 2010 arrived at nearly 80%.
The heaviest balance sheet offenders comprise troubled European countries like Italy, Greece and Portugal. And the United States isn’t far behind with $15 trillion in debt and a debt-to GDP ratio cresting 100%. And tilting the scale at over 200% at the end of 2010 was, none other than, Japan.
The result of this rapidly increasing debt means more government meddling, a further sluggish tempo in the already weakened economic environment and the likelihood of further nation citizen uprisings.
One of the biggest problems with economic crises is that ordinary economists and financial advisers either
1.) Don’t see the impending problems
2.) Or merely will not acknowledge to them.
That’s precisely what took place in the fall of 2008, when the bank crisis began in the United States.
Since then, global governments have persisted in spending and spending, in the meantime production is grinding to a halt as joblessness is skyrocketing.
Now, as we step into the fourth year of the post-crisis situation, there is no sign of growth that is remarkable enough to get us out of the depressing feedback loop in which governments and the press continue to operate.
A depressing feedback loop seizes the population’s attention when massive government debt loads:
a) as an ever-weakening monetary system and
b) a dangerously sluggish economy feed off each other.
Increasing debts become unsustainable and set off austerity procedures intended to decrease spending and/or raise taxes or other revenue basis to try and lower debt.
The result = a downward spiral of commerce and financial movement and a banking crisis usually follows.
Under pressure to stimulate the market, the Fed and other central banks carryout band-aid fixes by printing (fiat) money and governments add additional austerity measures, which creates the vicious cycle of the feedback loop all over again.
Nothing YOU can do about this globally.
But you CAN prevent it from affecting you.
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