Global Debt explosion increases odds of Wiedemer AfterShock Economy

Global Debt explosion increases odds of AfterShock Economy



Refer to link for in depth update regarding state of world debt. It continues to increase much faster than world economic growth.


Great examples:

190 trillion dollars is amount of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.

$16,749,269,587,407.53 – The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.

In sum, the above link updates Robert Wiedemer Fall 2012 AfterShock Investor book chapter 2 that provides exponential trends in Gov debt growth  and Fed balance sheet increase.

Carefully attend to Europe.  Taxes on bank accounts in Cyprus may be harbinger of similar events occurring to Greece, Spain, Italy. 


Another great example is fact European banks are leveraged 24:1.  This means that a 4% drop in their assets will wipe out the banks and likely lead to global financial panic greater than 2008.  The US contributed significantly to this scenario. How?  The answer is by increasing total gov debt by 58% since BO – 16.7 trill from 10.6 trill.  Our economy only grew 6% during this time.


Recall that Reagan got us out of severe recession by stimulating the productive private sector. BO responded to Great Recession by stimulating the largely unproductive public sector with devastating results.


The 2008 TARP main goal was to allow the economy time to take steps to regain normal economic growth.  That opportunity was largely squandered.


One seriously has to wonder if BO plan all along has been to destroy capitalism and start fresh with a Saul Alinsky version of increases command and control economy.  I think BO knows the numbers in this link.


What to do ?   Reach out to a journalist who will confront BO with these numbers and ask if his strategy all along has been to create this Saul Alinsky command and control economy.  This will get more of our economic illiterate citizens aroused.  Many I predict will read Rules for Radicals.  This then can lead to a major confrontation against BO economic strategies.  Then Congress must block BO Leftist strategies.  Then we must hope we have enough time to prevent a global financial panic and elect true capitalists in 2014 Congress and a president Rand Paul in 2016.


Below is another perspective from an economic blogger that I follow:   


When debt numbers reach too high a level, obligations & debt can only be paid with hyper inflated money.  We have a chance in the USA with the sequester denting the government mindset.  Also …..  as more & more of ObamaCare is understood people may revolt & throw it out.  Along comes Rand & we may have dodged a huge bullet.


In conclusion then let’s do all we can speaking with friends, relatives, and acquaintances, blogging and contacting our House and Senate leaders to do all possible to rein in debt so that we can at least lessen the impact of very likely day of Reckoning – the Aftershock Economy.  This includes persuading Europe to reduce their debt and rely more on a market economy before their economy tanks.  Closely watch Cyprus, Greece, Spain, Italy this week.

 more on AfterShock Economy —–

Follow me on Twitter @Economics501

About economics501

1 - free market Capitalist; 2 - Fitness Entrepreneur; 56 years old, VP at an Investment Bank in NYC, ex Venture Capitalist, happily married with 2 girls. Education: Rutgers and NYU. I allow Ted Hruzd, my friend to blog at will here. He has many posts here. I have known Ted since we were both students at NYU. Ted also works for an Investment Bank as a VP in Equity Global Markets. ------------------------- I was very very Socialist leaning as a 22 year old. I then strongly believed in Gov role in helping the poor. However, as a USDA Child Nutrition Programs, I personally accounted for millions of fraud, abuse, and waste of tax payer money. I came to believe that the poor would be best served with less Gov programs and more with direct aid via tax system. Then after 5 years I became a free market capitalist, was a venture capitalist in 2007 and helped start 2 high tech companies. I dedicate this site to champion free market capitalism as the best road to Prosperity. Please join in. If you disagree, fine, but please post with dignity and class and be civil. Argue with facts always.
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