Debt & Deficits

With interest rates being pushed lower year after year, interest expense as a % of disposable income has been declining in Canada and, for the moment, these low interest rates keep the whole thing glued together but, were interest rates to ever rise, Canada's economy would blow up. Here's why.

Most Americans are living paycheck to paycheck so all this access to subprime debt is going to do is allow them to consume future income and guarantee that any ability for future financial security disappears.

For a couple of years the world's central banks fooled the public into believing that perpetual debt was a good way to rejuvenate the markets but, alas, there will be no free lunch. Having a system addicted to perpetual debt is NOT a solution as the following 9 indicators clearly suggest. Again, nothing comes for free in this world.

Hardly anyone thought the Fed would fulfill their plan to stop monetizing the country's debt - and absolutely no one thinks they’ll succeed if they do - but the Fed is acting like it’s serious. The Fed has stopped adding and started subtracting - the money supply is falling - but will this cause the stock market to begin to tank like it did on the last two attempts causing the Fed to relent?

Q: Is it correct to assume throughout that an expanding trade deficit impacts the economy negatively? A: No, the relationship, if there is one, is that there has been a positive -- not negative -- correlation between the stock market and the trade deficit. Let me explain.

Should we be concerned when tepid economic growth and low inflation are accompanied by increasing public and private debt? Are we borrowing just to stay alive? [As I see it,] national governments will increase national debt loads in order to stay in power until one or more of them default. Then their will be financial panic which will most certainly be deflationary. Here's why.

There exists in the Congress, in the Obama administration, in the media and on Wall Street, a national belief that America can print paper money and grow its economy as its route map out of debt. With annual GDP growth expectations of 2% to 3% over the next several years, this is a completely false hope!

We are heading for a derivatives crisis unlike anything that we have ever seen. It is going to make the financial meltdown of 2008 look like a walk in the park.

This article takes a look at the expected trends in the price of oil, cost of living and currency wars and how they most likely will impact inflation.

There has been a great deal of misinformation and propaganda - outright lies - about the $18 trillion U.S. government debt and this article examines 5 of the biggest such lies.