Storm Clouds Predict Financial Crisis as National Debt Poised to Hit $22 Trillion
According to the U.S. Treasury, the national debt is about to cross a major threshold as it will surpass $22 trillion dollars around the first of the new year in 2019.
Since Barack Obama entered the White House in January 2008, we have added an average of $1 trillion a year to the national debt and worse yet, no one is doing anything to stop it.
In fact, Congress is accelerating its spending and, according to The Economic Collapse Blog, there is no possible scenario in which this ends well. Meanwhile, the global financial elites are talking about a new financial crisis and the deputy head of the IMF recently said he sees “storm clouds building.”
The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for another downturn, the deputy head of the International Monetary Fund has warned.
David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system.
“As we have put it, ‘fix the roof while the sun shines’. But, like many of you, I see storm clouds building and fear the work on crisis prevention is incomplete.”
Former Fed Chair Janet Yellen also said “we could have another financial crisis” in a recent interview with CNBC.
“I think things have improved, but then I think there are gigantic holes in the system,” Yellen said Monday night in a discussion moderated by New York Times columnist Paul Krugman at CUNY. “The tools that are available to deal with emerging problems are not great in the United States.”
Yellen cited leverage loans as an area of concern, something also mentioned by the current Fed leadership. She said regulators can only address such problems at individual banks not throughout the financial system. The former fed chair, now a scholar at the Brookings Institution, said there remains an agenda of unfinished regulation. “I’m not sure we’re working on those things in the way we should, and then there remain holes, and then there’s regulatory pushback. So I do worry that we could have another financial crisis.”
So what can be done to fix things? Hedge fund manager Kyle Bass says a new $1 trillion infrastructure deal will help avert an “inevitable” 2020 recession.
That sounds nice, but we are already adding more than a trillion dollars to our national debt every year. If we want to spend a trillion dollars fixing up our crumbling infrastructure, where is that money going to come from?
We have been spending far, far more money than we have been bringing in, and that has been propping up our economy for quite some time now. But we are progressively making our long-term problems much worse, and there is no way that we can sustain this Ponzi scheme for much longer.
And it isn’t just the national debt that is a massive problem. U.S. consumers are more than 13 trillion dollars in debt, and a new report has discovered that credit card debt continues to surge to new heights…
Americans are carrying a record amount of credit card debt, according to a new study. The average American family has about $7,000 in revolving debt compared to $6,081 this time last year. And as interest rates rise, so will those monthly payments to service these debts.
This year’s report focused on revolving debt (debt that is carried over month after month) because it is a “more accurate indicator” of financial hardship, said NerdWallet, who compiled the report. “Credit card debt is the stain on millions of Americans’ finances that doesn’t scrub off easily, if ever,” says NerdWallet credit card expert Kimberly Palmer. “High interest rates combined with expenses that continue to outweigh income mean that some households are unable to fully rid themselves of debt and, in fact, continue to take on more.”
We are a society that is absolutely addicted to cheap debt, but now interest rates are going up, and that is going to cause some enormous financial problems.
Our world has never seen anything like the debt bubble that we are facing right now, and most of that debt was accumulated when interest rates were low. The system simply cannot handle higher rates at this point, and according to Michael Pento “a worldwide depression is coming like we have never seen before”…
“Unfortunately, a worldwide depression is coming like we have never seen before because we have never before had so much debt sit on top of artificially depressed interest rates,” said Pento in an interview with USA Watchdog‘s Greg Hunter back in May.“The hubris and arrogance of central banks to take that away, they are way too late in doing so, and they think they can do this with impunity. They are dead wrong. They (central banks) have always caused recessions. We are heading into a global depression.”
Whenever you go into debt in order to enjoy a higher standard of living than you currently deserve, there are short-term benefits but long-term pain.
For decades, America has been stealing from the future in order to make the present more pleasant, but now we have painted ourselves into a corner.
If we had made wiser choices, things could have turned out differently, but that didn’t happen.