“The Suffocation of Unsustainable Debt”

“The Suffocation of Unsustainable Debt”
by My Budget 360

“In 2002 total global debt was above $80 trillion.  In 2010 that figure more than doubled to over $190 trillion. GDP is unlikely to support this amount of global debt. Today the global debt to GDP ratio is over 300 percent. As the crisis hit in 2007 GDP actually fell but total debt kept going up.  Even as GDP recovered global debt continued to expand.  It is hard to moderate the appetite of central banks seeking to transfer toxic assets from banking associates and removing any opportunity for real price discovery.  Much of the price discovery is being shouldered by the citizens of each of these countries.  The financial sector especially with the too big to fail has been sheltered at all costs.

Yet peak debt is hitting hard across the global markets even here in the US where our total debt just seems to keep going up and up.  We are likely to reach another debt ceiling limit in 2012. We are already seeing that massive amounts of debt have a limit on what they can do for an economy and we are already seeing inflation on the cost of daily goods that Americans buy. Those that don’t bother shopping might say inflation is not bad but the average American with a $25,000 paycheck is feeling the pinch more and more each day.

Just look at our own government debt:

If we look at our own debt, it has gone from roughly $6 trillion in 2000 to a stunning $15.2 trillion.  At some point people will collectively begin waking up and realize none of this debt will be paid back.  Not exactly a pleasant realization.”

- http://www.mybudget360.com/

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