global debt hits record highs

Do not confuse the state of the stock markets with the state of the global economy.

Any idiot can print money – and over the last eight years it would appear every idiot has.

Back in 2007 I wrote about the global debt passing $140 trillion. That’s the total global debt which comprises: 1. Household debt 2. Government debt 3. Corporate debt 4.Financial debt.

Of that $140 trillion, global household debt in 2007 was around $33 trillion and global government debt was about the same. We discussed the problems of paying back such huge amounts and the idea that you cannot pay off one debt by creating another debt that was even bigger. You really don’t need to have any special qualifications to understand that one.

But since then the matter has got much worse thanks to endless rounds of quantitative easing (money printing) by the central banks.

Global debt spirals out of control

Here we are some eight years later and total global debt has increased to, gulp, 200 trillion dollars. No wonder the Greek crisis got swept under the carpet.

Of that $200 trillion, household debt has increased from $33 trillion to $40 trillion – roughly a 20% increase over the last eight years.

Meanwhile, government debt has increased from $33 trillion to nearly $60 trillion. An increase of around 82%.

We may not know how long this stupidity can continue but we do not it is an unsustainable model. The bigger the debt becomes the bigger the crash that will follow. Everything you have learned over the past seven years about protecting yourself from government stupidity is even more relevant today than it was seven years ago.

Global debt is beyond repayment – protect yourself while you still have time

Use all the skills you have learned over the past seven years to diversify your assets and protect yourself from what have been described as the most dangerous nine words you will ever hear – “I’m from the government and I’m here to help”.

 

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