Congress Raises Debt Ceiling
We are spending borrowed money. Congress raised the debt ceiling to 12.4 Trillion. Divided by 308 million Americans, that is more than 40,000 dollars of debt per person, women, children, men, old young, everybody included. Imagine the debt burden on people who are actually working and paying tax.
In a decade, this government debt is expected to double! That is $80,000 USD per person. Let us say average household size is 2.5 people. Then the debt is currently $100,000 US dollars per household. And it is on it's way to $200,000 within a decade!
Folks, that's like buying a house! Every US household owes a house! Let us assume median home price is 175K in 2009. Do you know what that means? If every US family owes a home, it means their home is borrowed! If entire US comes together and sells all of our homes to foreigners (let us assume there is a buyer at this price), we still cannot pay off public debt! Housing bubble is fueled by this debt. It is borrowed from the future.
Now, that was the public debt alone! All of these US households owe money. Household debt in US is around 10 trillion as well. That is private debt. US corporations owe money too! That is private debt as well. Total debt in the economy runs about 50 to 300 trillion dollars.
How did we get here? Answer:
We borrowed and spent!
What does that do to prices? Answer:
It inflates the prices!
When we reach our limit of borrowing, what do you think happens? Answer:
Prices go down! Price of everything, stocks, houses, commodities, gold, even your salary are all based on borrowed money! When we are unable to borrow any further, all prices will collapse! Be prepared for the day of reckoning! When deflationary crash hits, no job will be spared! Debt is the root cause of the crisis. This is Great Depression in slow motion! Stock market crash will go into history.
