The above is a plot of the GDP, Debt and ratio of Debt to GDP. We will soon exceed 100% debt load to GDP. This should be terrifying to all. Just look at what has happened in the past 18 months, we have seen debt go from a 62% load to almost 100%.
The above is the last year alone. There seems to be no stop.
The growth rates are plotted above and show a constant positive growth. This will be unsustainable.
Here is what is happening now. The FED buys junk and prints money and the banks buy Treasuries to keep the engine going.
Now here is what will happen next. The junk will be all on the FED's books, so the FED will now buy the Treasuries, the old ones, print more money, give it to the banks, who will buy more Treasuries. Sound unstable, yes.
The cycle starts up and becomes a positive feedback loop which we engineers know is unstable!
This is what leads to hyperinflation. We are printing like mad men to stay ahead of this bow wave, and it is rapidly catching up on is and DC is clueless.
To summarize here is what is going to happen.
And sooner than later! Hold on to your hats. This will make Carter look like a financial whiz, and I was there then.
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