Our SYSTEM is heading for a Debt Jubilee. The USA may be first then the entire planet. America could lead the way as Joseph Biden has unilaterally acted to cancel some $500 billion (half a trillion) of Student Debt. This unilateral decision of our Dictator, Mr. Biden, reveals our dire situation (politically). What are the DEBTS which challenge our system as of today:
1. Student Debt of some $1.7 trillion (can not be repaid). Biden has now chosen to cancel this Debt. Congress was not consulted and this reveals the nature of our System (we have a Mob Rule Dictatorship).
2. Mortgage Debt is now $19 trillion and this debt will become the issue by the end of 2022. Real estate is in the biggest BUBBLE of all history and this bubble will start to burst by the end of 2022. This will expose borrowers who are unable to pay their mortgages. The higher interest rates have set the fuse.
3. Commercial loan Debt is next as the Office Market is now revealing vacancies of 20%. As our Fed continues with higher interest rates to challenge INFLATION, this debt gets exposed as mostly unpayable for many owners who can not rent their space at the necessary rates to break-even.
4. Valuations will plummet as Higher Cap rates will reduce VALUES and force liquidations and bankruptcies in the commercial sector of our economy. All growth in commercial real estate is governed by Cap Rates. Higher Interest Rates cause Higher Cap rates and this LOWERS VALUE. Refinance becomes impossible and new construction slows to a crawl.
5. Credit Card Debt is also in a bubble. The average holder owes over $7000. Soon this debt will grow beyond reason as people discover that their life style of spending can not continue at the current rate. Credit card debt will increase and defaults will grow. Again, the higher interest rates are part of the issue.
6. Government deficits will increase (Biden claims the opposite). As less revenue comes into the government accounts, spending will continue and deficits will grow. The current deficit is $1.5 trillion. We could witness double this number in 2023. With higher deficits, the National Debt grows simultaneously. We are now $30.7 trillion and counting. None of this DEBT can be repaid. It's impossible as spending is needed to survive. Our Fed can create these DIGITS (called dollars) with the click of a computer key. This allows government spending to continue even as foreign lenders (China, et al) will desire this to STOP.
7. The BUBBLE in our stock markets can be manipulated UP and UP even as the general production economy goes DOWN and DOWN. This diabolic situation allows our Fed (and the government policy makers) to cover-up some of their corrupt spending policies. We have a corrupt currency system which currently favors the U.S. and penalizes foreign nations (who must borrow in dollars to survive). All this is coming to an END in 2023 (IMO). A new Reserve Currency is now in the early stages and it is meant to replace the DOLLAR. It's called the BRICS currency system (Russia/China/India/Brazil, and South Africa).
Conclusion: Our economic system is scheduled for collapse sometime in 2022 or early 2023. The real estate situation and higher interest rates are the primary driver for this collapse. China is suffering as their growth continues to decline. Their real estate sector is also in DIRE straits. Japan is operating on counterfeit yen from their Central Bank (this will implode eventually). Europe is now suffering from inflation and stagnation. Russia is in a war with Ukraine and supply issues grow exponentially from this WAR!
Our World Economy is heading for a DEBT JUBILEE at some point (it has already started with the Student Loan cancellations). Next will come the real estate collapse and then the personal debt bankruptcies and collapse. Government debt and their collapse will END the game of Keynesian Economics which started in the 1930's. Keynesian Economics is what started this DEBT bubble and John Maynard Keynes (who died in 1946) felt that this DEBT situation could continue indefinitely (debt allows governments to survive until it all ends with a JUBILEE when the collapse arrives).
Get ready for the BIGGEST debt collapse in all history. It has STARTED with Biden's unilateral Student DEBT cancellation. Will he initiate a Mortgage Debt cancellation next? We live with Central Planning at the Highest Levels. Our FED and our President seem to RUN all our commerce (in the USA). It's totally DIABOLIC IMO. Central Banks are running all global commerce. None of this can last long-term. Think for yourself on all these issues. Pass this missive on to your friends.
I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com and http://kingdomecon.wordpress.com.
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