From best of Bill Buckler

INSIDE THE UNITED STATES
OBLIVIOUS TO THE CLIMBING DEBTS
Nothing better describes the situation inside (and outside) the United States these days than the total nearly mindless attitude toward debt. Today, when debt is called "credit", it is as if it is not debt at all but simply another way to get or find more money to spend. Try as one might, look through all sectors of the US economy, and with few exceptions, that is the attitude in place. In one respect, doing such research is hair raising, but in any another respect, it makes the task simple in principle. The attitude is all pervasive, one can take any US economic sector as an example. In the US corporate sector, the engine room of the US economy, to take one example, debts are over $US 9 TRILLION, representing 84 percent of GDP.
Then keep in mind the US Treasury debt which is closing in on $US 8 TRILLION and all the State debt, the mortgage debts, and the private and personal debts. One is looking at a debt monster. It is right here where higher commercial bank interest rates are going to start hitting like torpedoes striking below the waterline. Debts, as a minimum, have to be serviced with regular payments of interest if nothing else. With US corporate debts over $US 9 TRILLION, either higher interest rates or lower earnings are going to kill a lot of US corporations. The entire situation is now fragile in the extreme.
Ó 2005 – The Privateer
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