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An excellent article from 2002 with explanation of today's economic and financial collapse due to debt.

The Last Wave by James J. Puplova

National Debt

As the graph of total American debt illustrates, America has now become the largest debtor nation in the world -- a trend that is not sustainable. No nation can borrow its way to prosperity in perpetuity. From our government and corporations to its citizens, debt permeates every sector of the American economy. One of the hallmarks of America's economic boom years during the 80's and 90's was the remarkable change in individual financial behavior. Individuals went from the accumulation of liquid assets to illiquid assets to the addition of liabilities. Mass marketing of debt and the disintermediation of credit in the financial system lessened the appeal of cash with consumers.

Net household liquidity turned negative as individuals transferred liquid cash savings into less liquid securities with stocks, bonds, and mutual funds. The higher returns offered by financial assets made the financial markets that much more alluring to all sectors of society. From senior citizens dependent on investment income to pay bills to younger indebted households looking for higher returns to supplement the lack of savings, financial assets replaced cash. As memories of the depression and post-war hardships faded, a new generation of Americans took to the credit markets like a duck to water.

The thrift-conscious, buy-with-cash culture has disappeared. The revolution in the credit markets, the wave of technological change in the financial industry, and the plethora of financial products and means for borrowing money has been embedded in the American way of life. The willingness with which debt is assumed is one of the more dominant aspects of the American economy. From the ubiquitousness of credit cards, home mortgages, home equity loans, margin debt, to installment debt, credit has securitized and mortgaged the entire asset base of the U.S. economy. We have become our own worst enemy and day after day, we sink deeper in debt.

Reaganomics

"But I will not let myself be reduced to silence."

Global Warming - distance between America and Europe is steadily increasing.

by Oui on Wed Apr 14th, 2010 at 11:46:49 PM EST
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