If you are listening to the politicians they are telling us that interest rates are going to have to go up sooner or later. In the next breath, they say that trying to keep them as low as possible will help us folks on Main Street and they want to help us out. They are talking about how debt kills little people all the time. Have you heard the joke about “I’m from the government and I’m here to help”?
The fact is that if interest rates do climb the people who are likely to lose their jobs are the politicians, at least they will be the first followed by millions of people in the public and private sectors. Why will this happen?
Let’s take a quick look at the government debt in the US. This is a good barometer for the rest of the world. Last month Congress raised the legal limit that the US economy can be in debt to 14.2 trillion dollars because they are getting closer and closer to that limit. So if the Zero percent interest rate policy took a 1 percent jump it would cost the government 142 billion dollars just to service the debt.
Can you see by this example how debt kills? What if the interest rates went back to 5 percent? It would be a staggering cost to the government of 700 billion dollars. They bring in about 2.2 trillion dollars now so the cost of just servicing the debt would be about 1/3 of their revenues. Do you see why they would be losing their jobs if they left this self-serving 0 percent interest rate policy? Of course, they have all the media hyping the lie that they are doing it just to help out the little guy.
All we need to do is look across the pond to see what will happen if the government does become cash-strapped. Yesterday the Greek government’s credit rating was increased because they are in peril of defaulting on their debt. They are learning that debt kills. Of course, we all know that an increase in interest just pushes them closer to defaulting. Ireland. Iceland, Portugal, and Spain are moving ever closer to their limits too. Germany, Britain, and France are not far behind. I hate to be a harbinger of doom but the “Recovery” that we are in is like smoke and mirrors. One false move by the folks who run the world economies will bring everything crashing down. It is kind of like watching Humpty Dumpty sitting on a wall. If he tips we are headed for a deeper depression than happened in the 1930s.
Is this good or bad? For individuals, it can be a time of great opportunity. For most, it won’t be very much fun at all. Coming out of the great depression were thousands of people who became very wealthy. This will happen again. If you want to be on the winning side of the debacle then getting guidance from people who understand what is happening is crucial. Here is a newsletter that doesn’t stick its head in the sand and does realize that debt kills. www.InsiderSecretsToWealth.com. Check it out and I’m sure you will agree with the folks that put out this newsletter.