$21,714 For Every Man, Woman And Child In The World - This Global Debt Bomb Is Ready To Explode

Tyler Durden's picture

Authored by Michael Snyder via The Economic Collapse blog,

According to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars.  Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number.  If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally.

So if you have a family of four, your family’s share of the global debt load would be $86,856.

Very few families could write a check for that amount today, and we also must remember that we live in some of the wealthiest areas on the globe.  Considering the fact that more than 3 billion people around the world live on two dollars a day or less, the truth is that about half the planet would not be capable of contributing toward the repayment of our 152 trillion dollar debt at all.  So they should probably be excluded from these calculations entirely, and that would mean that your family’s share of the debt would ultimately be far, far higher.

Of course global debt repayment will never actually be apportioned by family.  The reason why I am sharing this example is to show you that it is literally impossible for all of this debt to ever be repaid.

We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system.

Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.

And he is precisely correct.  Everything might seem fine for a while, but one day we are going to hit the wrong bump at the wrong time and the whole thing is going to go KA-BOOM.

The financial crisis of 2008 represented an opportunity to learn from our mistakes, but instead we just papered over our errors and cranked up the global debt creation machine to levels never seen before.  Here is more from Bill Gross

My lesson continued but the crux of it was that in 2017, the global economy has created more credit relative to GDP than that at the beginning of 2008’s disaster. In the U.S., credit of $65 trillion is roughly 350% of annual GDP and the ratio is rising. In China, the ratio has more than doubled in the past decade to nearly 300%. Since 2007, China has added $24 trillion worth of debt to its collective balance sheet. Over the same period, the U.S. and Europe only added $12 trillion each. Capitalism, with its adopted fractional reserve banking system, depends on credit expansion and the printing of additional reserves by central banks, which in turn are re-lent by private banks to create pizza stores, cell phones and a myriad of other products and business enterprises. But the credit creation has limits and the cost of credit (interest rates) must be carefully monitored so that borrowers (think subprime) can pay back the monthly servicing costs. If rates are too high (and credit as a % of GDP too high as well), then potential Lehman black swans can occur. On the other hand, if rates are too low (and credit as a % of GDP declines), then the system breaks down, as savers, pension funds and insurance companies become unable to earn a rate of return high enough to match and service their liabilities.

There is always a price to be paid for going into debt.  It mystifies me that so many Americans seem to not understand this very basic principle.

On an individual level, you could live like a Trump (at least for a while) by getting a whole bunch of credit cards and maxing all of them out.

But eventually a day of reckoning would come.

The same thing happens on a national level.  In recent years we have seen examples in Greece, Cyprus, Zimbabwe, Venezuela and various other European nations.

Here in the United States, more than 9 trillion dollars was added to the national debt during the Obama years.  If we had not taken more than 9 trillion dollars of consumption and brought it into the present, we would most assuredly be in the midst of an epic economic depression right now.

Instead of taking our pain in the short-term, we have sold future generations of Americans as debt slaves, and if they get the chance someday they will look back and curse us for what we have done to them.

Many believe that Donald Trump can make short-term economic conditions even better than Obama did, but how in the world is he going to do that?

Is he going to borrow another 9 trillion dollars?

A big test is coming up.  A while back, Barack Obama and the Republican Congress colluded to suspend the debt ceiling until March 15th, 2017, and this week we are going to hit that deadline.

The U.S. Treasury will be able to implement “emergency measures” for a while, but if the debt ceiling is not raised the U.S. government will not be able to borrow more money and will run out of cash very quickly.  The following comes from David Stockman

The Treasury will likely be out of cash shortly after Memorial Day. That is, the White House will be in the mother of all debt ceiling battles before the Donald and his team even see it coming.

 

With just $66 billion on hand it is now going to run out of cash before even the bloody battle over Obamacare Lite now underway in the House has been completed. That means that there will not be even a glimmer of hope for the vaunted Trump tax cut stimulus and economic rebound on the horizon.

Trump is going to find it quite challenging to find the votes to raise the debt ceiling.  After everything that has happened, very few Democrats are willing to help Trump with anything, and many Republicans are absolutely against raising the debt ceiling without major spending cut concessions.

So we shall see what happens.

If the debt ceiling is not raised, it will almost certainly mean that a major political crisis and a severe economic downturn are imminent.

But if the debt ceiling is raised, it will mean that Donald Trump and the Republicans in Congress are willingly complicit in the destruction of this country’s long-term economic future.

When you go into debt there are consequences.

And when the greatest debt bubble in human history finally bursts, the consequences will be exceedingly severe.

The best that our leaders can do for now is to keep the bubble alive for as long as possible, because what comes after the bubble is gone will be absolutely unthinkable.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Dame Ednas Possum's picture

https://youtu.be/_JnPHugL7kE

'Pizza Planet' paedo rape wagon in all Pixar movies. 

Note: it is in 'The Incredibles' when they land the camperwagon on the freeway. 

RagaMuffin's picture

By buying into this approach , Snyder actually reduces the US citizen's per capita debt load......Thanks

VinceFostersGhost's picture

 

 

Yeah......it's a lot more if you just say US.

 

Still......haven't seen a damn dime of that money.

Giant Meteor's picture

Checks in the mail Vince, any day now!

Bobbyrib's picture

It's also a lot more if you refine per US citizen to tax paying US citizens. Boy are we bankrupt..

VinceFostersGhost's picture

 

 

OK.......now you're really bringing me down....

canisdirus's picture

When you're in debt to a small circle of criminals that will only issue you debt, why not just round them up and execute them? There are at least a hundred thousand of us for every one of them. No matter how much paper they throw at us, it won't be enough to protect them from our hot lead deliveries if we all work together toward a common goal.

Arrow4Truth's picture

lol. You don't want the "money." It's debt.

jamesmmu's picture

Many of the 2017 economic headwinds I’ve described will hit during the Ides of March, just as the Trump stock-market Rally shows signs of topping out. This might not be the Great Epocalypse — not all at once anyway — but a large and likely correction is looming. I think the bear is about to be let out of his cage.

http://investmentwatchblog.com/will-mid-march-madness-maul-the-stock-mar...

MaxThrust's picture

"what comes after the bubble is gone will be absolutely unthinkable"

I Agree completely, thats why so many people are preping.

PhiBetaZappa's picture

Oceans of digital ink spilled on stories like this as if it matters.

The debt will never be repaid. Period. EOS

Giant Meteor's picture

Righteo, correct again ...

Debts that cannot be paid, won't be ... Shout out to Michael Hudson ..

Singelguy's picture

The longer they keep this bubble alive the worse it will be when it finally bursts. On the positive side most of the wealth that will be lost will be of the paper variety so the 1% that benefited the most from the growth of this debt bubble will also suffer the worst losses.

Yogieu's picture

Keeping status quo is not necessarily better, see Venezuela, Greece. Once debt bomb explodes, we will go though adjustment period, which may not be as bad as keeping debt bomb from exploding in long-term. Bad thing is that after adjustment period, debt is going to grow again, and so cycle will repeat itself all over again.

Arnold's picture

You forget Cyprus and Zimbabwe.
Oh , let's see....Revolutionary France, Wiemar Germany...etc.

GunnerySgtHartman's picture

Once debt bomb explodes, we will go though adjustment period, which may not be as bad as keeping debt bomb from exploding in long-term.

Agreed, the adjustment is tough but delaying it makes the inevitable even worse when it does happen.  That's one of the reasons why the 2008-09 bailouts were such a bad thing, and that's why the next crash is going to be a doozy.

JRobby's picture

The size of "The Can" is now twice the size in 8 years. It will start rolling over shit.

Doug Eberhardt's picture

They will raise the debt ceiling like they always do. Congress has no balls. Except maybe Pelosi. 

I named my last book Illusions of Wealth on purpose. Most are not aware of how things work and have no clue how to hold onto their wealth. Interesting how are education system is lacking any requirements to learn monetary policy, let alone investing in general. I tried to fill that gap, but most don't even read books any longer either, lol. 

Most will lose what they worked hard for, believing in buy and hold and government has our back until they wake up to another 2008/2009 crisis and ask, how could I let this happen again? 

This includes the illusion your pension will be there for you too. 

 

VinceFostersGhost's picture

 

 

Congress has no balls. Except maybe Pelosi.

 

Which I'm sure she stole from somewhere......and sent us the bill.

TheSkipper1967's picture

I very much agree.  I am 50, got divorced 2 yrs ago and have been paying down my debt, storing my arsenal, buying ammo, buying gold & silver and living way below my means.  I keep in good shape (take no medications) with cardio and weights.  I also have 4 kids.  My goal is to educate them in the real world not the fake consumerism fake currency world.  I want them to live and enjoy their youth but to also realize that life is not fair and to not trust many.  I don't put much trust into any man made institution and try to teach them to take ownership of their life and to make the most out of it.  If anything, I will leave each one a cache of weapons, gold & silver and long term food in #10 cans.  I will protect them until my end comes, then the rest is up to them.

Doppelganger71's picture

After the bubble comes the bullets......................................

wmbz's picture

May as well be 2,000,000.00 for every man, woman and child. It can never be repaid.

So just party on!

Seasmoke's picture

That's what they decided in 2008.

firefightergr's picture

My mortgage loan is 40000,i am not scared.

Giant Meteor's picture

Well, as long as you're not talking per month, you're probably fine.

IridiumRebel's picture

Look up odious debt. We don't owe this.

logicalman's picture

Another interesting concept.....

unconscionable dealing/conduct is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract.

Giant Meteor's picture

I'll go you one better. The longer and bigger the bubble, the more explosive the "pop."

The "status quo" becomes the status NO ...

Chupacabra-322's picture

There was a time, in the 70's - 80's, when Saturday morning cartoons were 2 - 3 hours once a week. Now it's Saturday morning cartoons 24/7.

Infantile nation. Sadly, history shows that maturity comes only from extreme adversity: famine, epidemic, war, complete economic collapse, all of which result in massive death and, for a while, anarchy.

Giant Meteor's picture

"There was a time, in the 70's - 80's, when Saturday morning cartoons were 2 - 3 hours once a week."

Indeed, that AND they were made exclusively for the kids, 

Edit, Ooops, serial downvoter in the house. Must be a cartoon fan, that or someone pissed in his Wheaties this morning.

itstippy's picture

I used to watch the Saturday morning cartoons as a kid back in the 1960's.  Interspersed with the ads for Slinkys, Big Wheels, Easy Bake Ovens, Froot Loops, and Barbie Dolls were patriotic spots touting the glories of joining the U.S.Army.  That'll tell you something about cartoon viewer demographics.

Seasmoke's picture

What's so hard about repricing Gold to $12,000USD with a touch of Debt Jubilee Reset.

Chupacabra-322's picture

List time I checked. I don't owe anyone JAKE SHIT. However, I do owe a couple of bullets to Criminal Politicalicans & Central Bankers. Remember, always double tap their asses.

Giant Meteor's picture

That's the spirit. I like the cut of your jib!

secretargentman's picture

Wouldn't head shots be more effective?

Bill of Rights's picture

I owe the Rothschild's, the Rockefeller's and the Morgans shit...

Giant Meteor's picture

That may be, but they want it anyway ..

booboo's picture

Them boys don't show their faces but they have the system set up that your portion will be collected via inflation and taxes and the usual armed thugs that drag you and the family out of your home screaming "this ain't fair". You can always bluster until that moment though, unless.........just sayin. Besides, it's just made up number payable in made up jew confetti to keep the pleebs in check and cowering in the corner. I am in favor of the 20 trillion dollar platinum coin stamped out by the U.S. Mint and handed to the bankers to fight over.

Giant Meteor's picture

Oh, no doubt. I take your point. Its all about the rent seeking and wealth extraction, and yes, we can as you suggest endlessly pontificate and moan about it, but there again comes into play, the "politics" of it all.

All bullshit, all the time. The nation, being thouroughly divided by brand x and brand y bullshit, doesn't stand much of a chance at any successful resolution. No, the time must come, wherein there can be no doubt, to be united in common cause, and my magic 8 ball says It's a Long Way to Tipperary ...

 

UmbilicalMosqueSweeper's picture

It's a long drop to the ground from the gallows trap door.

Giant Meteor's picture

Accept in that example, one always comes up short, with the neck of course, being long ..

booboo's picture

a good hangman adjust the drop in relation to the body weight or risk not snapping the neck or popping the fucking head right off, this is alway a crown pleaser, but the hangmans apprentice has to clean up the mess.

VinceFostersGhost's picture

 

 

That may be, but they want it anyway ..

 

Maybe we should send them all nailguns.

 

Handy things......nailguns.

UnschooledAustrianEconomist's picture

I owe them some PMs. Lead and brass.

BandGap's picture

Well, there you have it.

I will gladly pay my share on Tuesday.

There must be some sports we can all watch today. March Madness indeed.

Nohelp's picture

How many years has it been that we have heard these dire predicts of the financial collapse of the  system because of debt? If for one minute I thought this guy understood the difference in national debt and other debt and or national debt when it is denominated in a national fiat currencey I might read his article but since he doesn't, I don't bother.