The largest mountain of debt in the history of the world just continues to grow even larger, and everyone knows that this colossal debt spiral is not going to end well.  But we all keep playing along because nobody wants the party to end.  Right now, there is an unprecedented ocean of red ink covering the planet.  Globally, governments have never been in so much debt, corporations have never been in so much debt and consumers have never been in so much debt.  But every time someone suggests that this is a problem and that we should at least try to get debt levels to settle down a bit, people start screaming that “austerity” will hurt the global economy.  And of course it will.  But we can’t continue to live way, way above our means indefinitely.  Well, we can try, but at some point this entire house of cards is going to come crashing down and we are going to be facing the greatest economic crisis the world has ever seen.

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From The Truth Wins:

It is kind of like watching a slow-motion train wreck that you have no chance of possibly stopping that you know will end up killing lots of innocent people.  This debt crisis is going to end up destroying the global financial system, but there is not a thing that you or I can do to prevent it from happening.  The unprecedented debt binge that we are witnessing right now is going to continue until someday we hit a brick wall of financial disaster.  We can yell and we can scream, but it isn’t going to stop what is happening.

As the Telegraph recently noted, even the Bank for International Settlements is warning that debt levels are way too high.  According to the BIS, total public and private debt levels are now 30 percent higher than they were in 2008…

“This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behavior in the debt markets before the global storm hit in 2008.

“All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle,” said Mr White, now chairman of the OECD’s Economic Development and Review Committee.

The BIS can see the disaster coming, but even they have no chance of preventing it.

For the rest of this article, I am going to focus on government debt, but please keep in mind that corporate debt and consumer debt are also totally out of control globally.  It would be very hard to overstate the nightmare that we are facing.

But of course national governments are the biggest offenders when it comes to debt…


Japan now has a debt to GDP ratio of more than 211 percent, and as Simon Black of the Sovereign Man blog recently detailed, they are rapidly heading toward a national financial meltdown…

Looking purely at the numbers, Japan’s medium-term fundamentals are among the bleakest in the world.

Total government debt amounts to over 200% of the country’s entire GDP– a figure so large that the Japanese government spends 51.5% of the 43 trillion yen ($430 billion) they collect in tax revenue just to pay interest!

Perhaps even more astounding is that ‘primary balance expenses,’ i.e. normal government expenditures, totaled 70.3 trillion yen, or 163% of tax revenue.

The only way they’ve managed to stay afloat is by issuing more debt, which makes the problem even worse. In fact, 46% of the 2013 budget is being financed by debt.

These guys are running out of rope. And fast.

China is facing a different sort of a problem.  In that nation, the growth of private domestic debt is wildly out of control.

According to a recent World Bank report, private domestic debt in China has grown from 9 trillion dollars in 2008 to 23 trillion dollars today.

There is no way that is sustainable, and at some point that massive bubble is going to burst.


Even though some European nations have supposedly implemented “austerity measures” in recent years, debt levels continue to rise rapidly.  The following are some numbers that were recently released which show that government debt to GDP ratios for some of the most financially troubled nations in Europe are absolutely soaring

  • Euroarea: 92.2%, up from 88.2% a year ago
  • Greece: 160.5%, up from 136.5% a year ago
  • Italy: 130.3%; up from 123.8% a year ago
  • Portugal: 127.2%, up from 112.3% a year ago
  • Ireland: 125.1%, up from 106.8% a year ago
  • Spain: 88.2%, up from 73.0% a year ago
  • Netherlands: 72.0%, up from 66.7% a year ago

Anyone that tells you that the crisis in Europe is “over” is lying to you.  The debt crisis is getting worse, not better.

The United States

The biggest mountain of debt of all can be found in the United States.

30 years ago, the national debt was a little bit above a trillion dollars.

Today, it is rapidly approaching 17 trillion dollars.

At this point, the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.  And since Barack Obama entered the White House, the debt to GDP level has soared to unprecedented heights…

National Debt As A Percentage Of GDP

Sadly, this is just the beginning.

One reason for this is that the U.S. is facing some tremendous demographic challenges in the years ahead.

In other words, our population is getting older.

It is being projected that the number of Americans on Social Security will rise from 57 million today to more than 100 million in 25 years.

How in the world are we possibly going to pay for that?

Already, we are very heavily dependent on foreigners to pay our bills.

According to the U.S. Treasury, foreigners hold approximately 5.6 trillion dollars of our debt at this point.

China and Russia account for about one-fourth of that total.  Right now, China owns approximately 1.275 trillion dollars of our debt, and Russia owns approximately 138 billion dollars of our debt.

So what would happen if we went to war with Syria and they decided to quit borrowing from us and they started dumping our debt instead?

That is a very good question.

And actually, according to Zero Hedge foreigners have already started to dump a little bit of our debt…

Today’s TIC data showed something disturbing: for the fourth month in a row, foreigners were net sellers of US Treasury paper in July, as total foreign holdings declined from $5.600 trillion to $5.590 trillion which represents 49% of total marketable debt (including the debt owned by the Fed of course). In other words, since peaking at $5.724 trillion in March, foreign-held debt has declined by $134 trillion, at a time when yields have surged on fears the Fed’s tapering of its own purchases of bonds will mean less Fed frontrunning opportunities.

We certainly cannot afford for that to continue, because we desperately need other nations to finance our reckless spending.

Our debt is wildly out of control, and the only way we can keep the entire system from collapsing is to go into even more debt.

As I noted recently, if the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times.

That is a whole lot of money.

But most Americans do not consider it to be a problem because disaster has not struck yet.

Unfortunately, they simply don’t understand how quickly an exponential problem can overwhelm you.  I think that the following illustration from Simon Black is particularly helpful…

Let’s say you’re at a party in a small apartment that’s about 500 square feet in size. Then suddenly, at 11pm, a pipe bursts, starting a trickle into the living room.

Aside from the petty annoyance, would you feel like you were in danger? Probably not. This is a linear problem– the rate at which the water is leaking is more or less constant, so the guests can keep partying through the night without worry.

buff sale(2)

But let’s assume that it’s an exponential leak.

At first, there’s just one drop of water. But each minute, the rate doubles. So by 11:01pm, there’s 2 drops. By 11:02, 4 drops. And so forth.

By 11:27pm, there’s only six inches of standing water. Yet by 11:31pm, just four minutes later, the entire room is under nearly 8 feet of water. And the party’s over.

For nearly half an hour, it all seemed safe and manageable. People had all the time in the world to leave, right up until the bitter end. 11:27, 11:28, 11:29. Then it all went from benign to deadly in a matter of minutes.

By the time that our politicians and the talking heads on the mainstream media admit that we have a debt emergency on our hands, it will probably be far, far too late.

The greatest debt crisis the world has ever seen is coming, and there is nothing that anyone can do to stop it.

But you can take measures to get prepared for it.

Please get prepared while you still can.

    • RGR:  Raptor noted.
      I believe that the MELTDOWN of our global economic engine will occur in 2017.  The 2014 mid terms will be an indicator.  The middle East turmoil another indicator, and the final straw will be the 2016 Presidential winner.  Should Hillary or one of her ilk win, then it will be sooner, rather than later.  However, should a real conservative win, not a RINO, then we have to wait until 2017. 

    • Glad you all liked it! 😉
      yes, 2017 looks like a rough year in the making. 
      If not sooner, but that assumes TPTB are done 
      raping the US, or their plans get derailed somehow.

    The keg is just giving up foam, the furniture is broken, a dude is passed out in a puddle of his own vomit, two drunk chicks are pulling each others hair, the car parked in the front yard won`t start, and the cops are on the way.

  2. Heck RGR  even your raptor has inflation.
    The currency created is going somewhere–into the coffers of the TBTF banks, hard assets, the pockets of the hedge funds and shadow bankers, the sky high equity markets, more debt. One place it is not going is into the savings accounts of Average Joe.  We will experience the Weimar Republic on a planetary scale.  That will be indescribably ugly. Keep stacking.  The ants are laying in their supplies while the grasshoppers continue to fiddle in the summer time.

    • @AGXIIK: cool Email I got, posted here for all of SD:
       *Is this cool or what.  ****This is one of the cleverest
      E-mails I’ve received in a while.
      Someone out there
      Must be “deadly” at Scrabble.
       Wait till you see the last one!****It’s going to be  hard to top because**It fits to a “T” **
      ****PRESBYTERIAN**: **When you rearrange the letters:**BEST IN PRAYER
      ****ASTRONOMER**: **When you rearrange the letters:**MOON STARER
      ****DESPERATION**:**When you rearrange the letters:**A ROPE ENDS IT
      ****THE EYES**:** **
      When you rearrange the letters:
      THEY SEE ****
      When you rearrange the letters:
      ****THE MORSE CODE**:
      When you rearrange the letters:
      ****DORMITORY**:**When you rearrange the letters:**DIRTY ROOM 
      When you rearrange the letters:
      ****ANIMOSITY**:**When you rearrange the letters:**IS NO AMITY
      ****ELECTION RESULTS**:**When you rearrange the letters:**LIES – LET’S RECOUNT
      ****SNOOZE ALARMS**: **When you rearrange the letters:**ALAS! NO MORE Z ‘S
      ****A DECIMAL POINT**: **When you rearrange the letters:**I’M A DOT IN PLACE
      ****THE EARTHQUAKES**: **When you rearrange the letters:**THAT QUEER SHAKE
      ****ELEVEN PLUS TWO**: **When you rearrange the letters:**TWELVE PLUS ONE
      ****MOTHER-IN-LAW:**When you rearrange the letters:**WOMAN HITLER**
      *When you rearrange the letters:*

      *”An Arab Backed Imposter”*
      *Bet your friends haven’t seen this one!*

  3. How right you are AG, … we gotta be like ants.  A fitting analogy and perfectly natural.  Why can’t we all just get along?  I am trying to be a good ant.  Whether it is 2017, or 17 days, doesn’t really matter if & when the wheels come off.  We ain’t seen nothin’ yet!  

    • You’ll LOVE this, @AGXIIK!
      You just gotta love it. Can’t argue with statistics. Or Democrats!
      In 1865 a Democrat shot and killed Abraham Lincoln, President of the United States.
      In 1881 a left wing radical Democrat shot James Garfield, President of the United States who later died from the wound.
      In 1963 a radical left wing socialist shot and killed John F. Kennedy, President of the United States.
      In 1975 a left wing radical Democrat fired shots at Gerald Ford, President of the United States.
      In 1983 a registered Democrat shot and wounded Ronald Reagan.
      In 1984 James Huberty a disgruntled Democrat shot and killed 22 people in a McDonalds restaurant.
      In 1986 Patrick Sherril a disgruntled Democrat shot and killed 15 people in an Oklahoma post office.
      In 1990 James Pough a disgruntled Democrat shot and killed 10 people at a GMAC office.
      In 1991 George Hennard a disgruntled Democrat shot and killed 23 people in a Luby’s cafeteria.
      In 1995 James Daniel Simpson a disgruntled Democrat shot and killed 5 coworkers in a Texas laboratory.
      In 1999 Larry Asbrook a disgruntled Democrat shot and killed 8 people at a church service.
      In 2001 a left wing radical Democrat fired shots at the White House in a failed attempt to kill George W. Bush, President of the US.
      In 2003 Douglas Williams a disgruntled Democrat shot and killed 7 people at a Lockheed Martin plant.
      In 2007 a registered Democrat named Seung – Hui Cho shot and killed 32 people in Virginia Tech .
      In 2010 a mentally ill registered Democrat named Jared Lee Loughner shot Rep. Gabrielle Giffords and killed 6 others.
      In 2011 a registered Democrat named James Holmes went into a movie theater and shot and killed 12 people.
      In 2012 Andrew Engeldinger a disgruntled Democrat shot and killed 7 people in Minneapolis.
      In 2013 a registered Democrat named Adam Lanza shot and killed 26 people in a school.
      One could go on, but you get the point, even if the media does not.
      Clearly, there is a problem with Democrats and guns.
      No NRA member, Tea Party member, or Republican conservatives are involved.

  4. Personally, I would be THRILLED if SHTF holds off until 2017.  That would give us all 2-3 more years to prep than my estimate of spring 2014 through summer 2015 as a possible SHTF event horizon.  Time is terribly valuable but only if it is used properly.  If we just let it slide by without doing all we can to prep for the coming SHTF, then it will be absolutely wasted and SHTF might as well come tomorrow as not.
    As to the article…
    “Globally, governments have never been in so much debt, corporations have never been in so much debt and consumers have never been in so much debt.  But every time someone suggests that this is a problem and that we should at least try to get debt levels to settle down a bit, people start screaming that “austerity” will hurt the global economy.  And of course it will.  But we can’t continue to live way, way above our means indefinitely.”
    No, we can’t but many of our so-called leaders are talking and acting as if we could.  They see that there is a problem but wrongly assume that we have all the time we need to address it and get solutions working.  The bad news is that we have whatever time our creditors allow and not a bit more than that.  This is true of everyone who is in debt and the US is NOT an exception.  They are like a guy trying to defuse several sticks of dynamite and the fuse is burning but they have no clue as to how close is the flame to the blasting cap.  BOOM!  THEN and only then will they know.
    “The only way they’ve managed to stay afloat is by issuing more debt, which makes the problem even worse… These guys are running out of rope. And fast.”
    Agreed.  They are like a man hurtling down a mine shaft in free fall with a rope around his neck.  He does not know whether to fear the SPLAT! at the end of his fall or a mighty TWANG! as the rope snags on something.  Borrowing more to fend off immediate bankruptcy is incredibly poor money management.  It is like paying off one credit card with another credit card.  The result will be the same only the debt will be MUCH bigger if he continues to borrow ever more money.
    “So what would happen if we went to war with Syria and they decided to quit borrowing from us and they started dumping our debt instead?  That is a very good question.”
    It might be but it seems poorly worded.  Perhaps it should read, “So what would happen if we went to war with Syria and they decided to quit lending to us and they started dumping our debt as well?”.
    “We certainly cannot afford for that to continue, because we desperately need other nations to finance our reckless spending.”
    No, we do not.  All they are doing is enabling US asinine financial behavior.  What we most desperately need is an immediate spending freeze at, say, 2006 levels and significant cuts in government spending at all levels and the savings channeled into paying down our massive debt.  Not all of this will be savings, of course.  Some of it will be money that we then don’t end up borrowing.  Our debt situation may not need to be solved immediately but we do need to implement a process that leads us to a better financial standing over time… not a lot of time but over a workable amount of time.  Setting up such a process would definitely reassure our creditors that we were serious about solving this problem, rather than continuing to screw around with it like a pack of teenagers who have a lot of wants but few resources.  While this IS possible it will not happen unless and until our leaders develop something that has so far eluded them… and that is a sense of urgency.
    “By the time that our politicians and the talking heads on the mainstream media admit that we have a debt emergency on our hands, it will probably be far, far too late.”
    Agreed.  They will be the last source of info that any of us should turn to. They have a huge vested interest in maintaining the status quo and not in informing people of just how desperate the situation is or what they can and should be doing to prepare for it since the government is not.  The government will NOT be riding over the hill with sabers drawn, flags flying, and bugles calling out the CHARGE!  No,  they will have their horns pulled in and will be fighting to survive in any form that they can and at whatever cost to us they can manage.  They will not care if we go under financially because it is THEM, not us, that will occupy ALL of their attention.  Anyone thinking otherwise has probably not paid much attention to what happened during hurricanes Katrina and Sandy, neither of which will amount to a diddly-damn compared to the financial storm that is approaching.

    • BUT, @Ed_B, the longer it goes, the more likely TPTB are getting exactly what they want… 
      The SOONER it crashes, the more likely “the Good Guys” have won out! To a point, that is. 

    • I’m not convinced of the logic of your statement.  It could work out that way but I don’t see that it necessarily HAS to.  Consider a machine that operates under close tolerances and at high speed.  After a while, it begins to wear and slowly get out of balance.  At some point, the imbalance becomes so great that parts and pieces start flying off.  In the middle of all those flying chunks of metal, TPTB have lost control and are unable to recover regardless of the amount of time available because they are being ripped to shreds by the shrapnel.  Time may or may not be on their side… just as it may or may not be on our side.  Perhaps it is a matter of who best USES the time that they have?

    • @Ed_B:
      I’m not convinced of the logic of your statement.  It could work out that way but I don’t see that it necessarily HAS to. 
      Nor do I! It could be just as you say. My statement above has certain presuppositions that I am not sure of, by a long shot. Sometimes I feel like I want to go BACK INTO THE MATRIX, and live in blissful ignorance until it CRASHES DOWN ON ME! But it’s too late, no going back… I’m fully awake, but feeling tired of the grind, some days. 
      It just seems TPTB have complete control, even though they have launched this unalterable Self-Destruct Sequence. The only thing raining on their parade is the “Bix-ian Good Guys  and the few “awake souls” like those of us on SD that are putting on the pressure via the PMs markets and by getting out of U$D and spreading the word! I’m also tired of my unconverted Fiat losing buying power daily, while my PM investments (actually insurance) is standing static, at their merciless whim. It seems all our cries to begin an avalanche are muffled, but the boulders continue to become more unstable and dangerous. This adds to the illusion of CONTROL. 
      Maybe you understand better from whence my thoughts arise, and it also helps to type it out. 

    • “Maybe you understand better from whence my thoughts arise, and it also helps to type it out.”
      I’m pretty sure that I do because this is what most of us here are thinking and feeling.  Yes, it is a long and difficult road that we walk and often times it seems as if we are terribly alone.  But… fear not!  We can take some measure of joy in the fact that we are not truly alone.  We do have each other, dispersed though we may be.  While it is a tempting and comforting thought that we should all congregate in one place, that would not be wise.  We don’t want the collective knowledge, experience, and even wisdom to be at the mercy of a random and violent moment.  No, it’s better that we are dispersed so that we can be of help to many more of our fellow citizens.  It is likely that there will come a time when we are desperately needed and will be able to do MUCH good for our local communities.  Prepping:  it’s not just a job, it’s an adventure!  😉
      When we think about whatever amount of wealth we’ve managed to accumulate, we really only have 2 choices:  real money (PMs) or fake money (fiat).  In our hearts and minds we know which we can trust, price swings notwithstanding.  Yes, we can buy land and that can be a terrific investment.  But beware running out of money and not being able to pay the local price his tribute (property taxes).  Failing to pay them will result in them stealing our property and using whatever amount of force is needed to accomplish that.  They simply cannot afford for any precedent of that kind to be established.
      I have a good sized stack these days and no plans to stop adding to it when and where I can.  That said, I also keep a good stash of fiat handy so that I can satisfy the system and keep its minions at bay.  If giving them some little green paper coupons keeps them away, then that is a reasonable price.  I would be less inclined to give them any REAL money unless the rates were VERY low.
      And you’re right.  There is no going back once one has taken the red pill and exited the matrix.  The one guy in the movie who tried that ended up appropriately dead.  Justice?  Maybe.  Or fate.  Either way, his treachery was repaid and with interest.  I am not suggesting that this would be the fate of any of us for going back to sleep but fate has a way of handling such things that are likely quite unpleasant.
      In spite of the difficulty that we all face in prepping, rejoice in the fact that we can and are doing what we can to be ready for hard times.  Such times come to all people at some point in their lives.  Maybe it is something widespread, like war, famine, or disease.  Perhaps it is something more personal that only affects them and their family.  Whatever the case, it is better to be prepared in general, if not specifically, than not.  Millions of our fellow citizens COULD be prepping now but are either too poor to so so, completely unaware of any need to do so, or are aware and simply choose not to.  They are giving up their option for effective choice.  This is something that few, if any, of us here are ready to do.  Instead, we work and struggle to prep for whatever hard times come our way because we know the value of it and understand that it might very well be the most important thing we ever do.

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