Empire of Debt
The world is sitting in 2011 at the highest debt in history. As for the debt so dangerous is the fact that the richest and largest economy is the world leader and engine of the global debt. The U.S. may not like but the dominance after the Second World War, when the country supplied 40% of world output. But right now with 25%, they are still dominant. Without America in the global economy is nothing-not even the rise of China and certainly not the European economy. The development of the last two decades is particularly alarming that the largest and richest economy absorbs the earth's capital like a sponge - and then squandered on consumption. If the American consumer to march again and not so function, the impact will be felt globally. The U.S. economy is still by far the largest in the world. However, the U.S. has built up such a high mountain of debt at home and abroad, say the analysts of a "empire of debt".
The United States makes it the world before in three areas, how does the making debts: the state, foreign and domestic sources. Adding together all the debts, the states set up in 2004, debts of around 40 trillion dollars. That's over 443% of annual domestic product. Yet in 1957 the ratio stood at 186%. The estimated total assets of the United States is around 50 billion dollars in 2004. A normal family of four pushed 2004 a debt of $ 545,916 before it. A sum of the next generation with the best will not be served and can not be repaid.
There can be no doubt that the U.S. economy is dependent on the debt business as a junkie of the drug. If interest rates rise, which will meet the economic activity of the United States and paralyze sensitive. With interest at 5% interest charge of cheating the U.S. more than 20% of current income, at 7.5% it would already be at about 30%. This can not cope with household over time. Businesses and economies have to bear the burden of such interest, in crisis. Worryingly, however, the speed has increased with the Bush administration after the attacks of September 2001 the government deficit through their upgrade policy. In 2000 as the U.S. American household with a surplus of 1.3%. 2002 was at a deficit of 4% against. In this episode, the national debt have increased in 2001 to 5606%, 2007 it stood at 61.7%, and they continue to rise. The founding fathers of the U.S. would probably horrified. 1789 Thomas Jefferson wrote to James Madison: "No generation can take on more debt than they can pay back during the period of its existence."
The seemingly unstoppable march of the U.S. consumer was only possible by the invention always use new forms of credit and the willingness of Americans to this. The credit card was invented in 1949 at a dinner. Frank X. McNamara, then Managing Director of the Hamilton Credit Corporation, had dinner in the popular and expensive New York City Major's Cabin Grill agreed to discuss with business partners a problem. After the meal, McNamara wanted to pay, but had forgotten his money. His wife had to bring him money. The embarrassing incident McNamara brought the idea of credit card. 1950 startet McNamara, Alfred Bloomingdale and Ralph Sneider Diners Club. The participating stores and shops had 7% of each transaction that was processed through the card, pay to Diners.
Only in 1958 were the competitors American Express and Bank Card American (later Visa) in appearance. From then on, the triumph of the credit card was unstoppable.
After the Boys Choir of America's housing bubble in August 2007, central banks responded with its well-known and only means to prevent the threat of global deflationary crisis: Within weeks they created new money worth several hundred billion dollars. It will benefit but little good to throw the printing press to bring more money into circulation, as proposed by U.S. Federal Reserve Chairman Ben Bernanke in 2002.Today are we not at the beginning of a new global era, but at the end of a long globalization cycle. Globalization has reached a level that can not be sustainable. At the very forces of the individual are tense, stressed very much the social fabric of entire nations and economies. It can not be long until the bubble bursts globalization. The economic environment that has two generations determines our thinking will disappear sooner or later. Something new and radically different will take his place.
love and light
pyra