Egon Von Greyerz Blog | The US Is Dead Broke | Talkmarkets
Founder & Managing Partner at Matterhorn Asset Management AG
Contributor's Links: Gold Switzerland

Founder and Managing Partner of Matterhorn Asset Mgmt AG (MAM) and GoldSwitzerland based in Zurich, Switzerland.

EvG forecasted the current present problems in the world economy well over 10 years ago. In 2002 when gold was $300 per ... more

The US Is Dead Broke

Date: Friday, July 13, 2018 9:48 PM EDT

“The rich rules over the poor, and the borrower becomes the lender’s slave.” – Solomon

This is the story about Debtor, a newborn American baby. Debtor has just been born into the greatest economy in the world, a land full of promises and opportunities. This is what his parents tell him. But unbeknown to Debtor, he has been given a very bad start in life. Because the parents haven’t told Debtor, and how could they since they are not aware themselves, that he starts life with a massive debt burden that will grow manifold during his lifetime.


King Solomon’s words will ring true for almost every American born today. The average American is a debt slave already at birth. And by the time he dies, his debt will have increased exponentially, thus passing on an even bigger debt and greater enslavement to the next generation.

This is a vicious circle that has gone on for just over 100 years. A very small elite has become incredibly wealthy and the masses have become enslaved by private and government debt.

For the majority of people, it will be impossible to extricate themselves from this massive debt stone around their neck. Instead, they will add to the debt by taking on more debt.


But the government will also do their part. They will at least double the national debt every 8 years as they have been doing for several decades ( see last week’s article). Starting from $21 trillion debt today and assuming that Debtor will live until 88 years old, a doubling of the debt every 8 years would lead to a $43 quadrillion federal debt in 2106. Most of us will of course not be around to check that forecast but since it is just an extrapolation of long-term trends, it is difficult to argue with although a lot can, of course, happen in 88 years.

Even the $43 trillion US debt in 2106 could be conservative. Higher deficits and higher interest rates, both being likely, could multiply the $43 trillion many, many times.

I am sure that no one expected, in 1981 when Reagan started with a $900 billion debt, that the US debt would have gone up 23x to $21 trillion, 37 years later. No one likes forecasting the truth, because the truth looks horrific when it comes to all the mismanaged economies in the world.

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