We’ve Reached the “Zero Point” of Debt Creation…”Hurtling toward a massive financial crisis.”
by Harry Dent
WolfStreet.com
September 1, 2016
Forty-five years and counting: We’ve been on a debt spree since the early 1970s when we went off the gold standard, covering every possible angle. Trade deficits, government deficits, unfunded entitlements, private debt – you name it! Our total debt has grown 2.5-times GDP since 1971.
How could economists not see this as a problem? How is this the least bit sustainable?
It isn’t. We’re hurtling toward a massive financial crisis, and all we have to show for it are financial asset bubbles destined to burst. And when they do, they’ll wipe out the artificial wealth they’ve created for many decades… in just a few years, as they did from late 1929 into late 1932!
The chart below shows the common-sense truth.
As with any drug – and debt is a financially enhancing drug – it takes more and more to create less and less of an effect. Eventually, you reach the “zero point” where there is no effect and the drug kills you from its very strain and toxicity.
We’re rapidly approaching that zero point, after every dollar of debt has produced less and less GDP steadily since 1966:
The Rest…HERE
