US Action News

The government is in what is known as a debt death spiral. They must borrow money to repay prior debts. It is as if they are using their Visa Card to make an American Express payment. The rate of new debt additions dwarf any rate of growth the economy can possibly achieve. The end is certain, only its timing is unknown.

[W]e’re doing the same thing that led to the 2008 blowup — we’ve learned exactly nothing. In real terms our GDP is in fact contracting by about $500 billion a quarter, after adjusting for debt expansion — that’s $2 trillion a year, more or less. – The Market Ticker

Every facet of global manufacturing is slowing …

The average 7th grader likely understands that he cannot spend more money than he has for years on end. The average economist does not.

Ours is a stumbling economy with little in the way of knee pads to cushion a fall. … Based on expectations for the rest of 2012, economic growth will remain in the cellar.

When the debt-to-GDP ratio of a country exceeds 90%, much less 100%, the drag on economic growth begins to rise sharply. This is one of the main problems facing many of the smaller Euro-zone countries today: They are carrying so much debt that they do not have the ability to “grow” their way out of their debt problems. The US has now also reached the level at which our total indebtedness is robbing economic growth.

Since we have yet to address the real cause of this recession, we are moving inexorably closer to causing The Greater Depression. If policymakers and mainstream economists fail to understand that the progenitor of a depression is debt and inflation, they will also be unable to provide a genuine solution. And the “solutions” they do offer are tantamount to seeking the avoidance of a hangover by forcing down a few more drinks.

The combination of huge amounts of debt and huge amounts of leverage is incredibly toxic, and that is what we have all over the globe today. Almost every major nation is drowning in a sea of red ink and almost all of our major financial institutions are leveraged to the hilt.

The American people must begin to educate themselves, understand the true nature of the dilemma at hand, and realize that Barack Obama and the Democrats are the problem not the solution.

85% of international investors recently surveyed by Bloomberg said Greece will probably default, with smaller majorities predicting Portugal and Ireland will do the same.