Monday, July 16, 2012

Folly, illustrated

Courtesy of Zero Hedge, here's the clearest illustration yet of the economic reality that's staring us in the face like the muzzle of a shotgun.

You'll find a longer explanation at the link.  Here's the simple version.

  • The annualized growth in the US Gross Domestic Product has now fallen to 1.1%.
  • Total US marketable debt (i.e. Treasury bonds, used to fund US government expenditure) has doubled over the past four years, at an annualized rate of 21%.
  • This country's public debt to GDP ratio is now over 100%.  In other words, for every dollar of value we produce, we owe more than one dollar of debt - and the imbalance is getting worse by the day.

Our national debt is now unpayable unless inflation drastically reduces the value of the dollar - which will simultaneously wipe out the value of our savings.  We've spoken of the consequences of this imbalance many times, so I won't bore you by repeating them.

Mathematics is a science, not a political football or a propaganda talking point.  Reality cannot and will not be denied.  This situation cannot and will not be sustained.


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