Crumbling Under Debt

Most people I know work two jobs. Some work three. The big money players are in foreign currencies, not equities. I just started another business so that I can sock the money away because like everybody with whom I talk I believe a depression is coming: if you aren't able to eat, you will be eaten.

Crumbling Under Debt: "According to Business Week, both the European Central Bank and the Bank of Japan have raised their interest rates -- which could signal that the days of foreign investors propping up the U. S. economy may soon be on the wane. Bottom line, this potentially will have serious consequences for all Americans, but especially for average Americans living on the edge of poverty.

The first consequence will be a rapid decline in Americans' standard of living. Fed Chairman Ben Bernanke insists the economy is strong, because many of the traditional measures of economic growth remain solid. Inventory levels, corporate profits and unemployment statistics all point towards continued growth. But what about the $3 billion a day that Americans cumulatively spend on interest payments? What about the estimated $834 billion that Americans have borrowed off their mortgages last year alone? Do average Americans have any kind of savings to use as a cushion in the event of a 'hard landing?' Can an already-hard-working single mom just go back into the job market to make ends meet when serious inflation kicks in?

Second, should our debt levels continue to increase at unsustainable rates, we will soon reach a point where foreign investors demand an interest rate premium for lending to us. Or worse yet, they may simply decide to put their money in other financial instruments than U. S. Treasury bonds, which will suck the wind out of the U. S. economy very rapidly and likely lead to recession or a depression.

Third, weaknesses in the U. S. economy will cause the value dollar to weaken relative to foreign currencies. When this happens, as it inevitably must, everything Americans buy from abroad will cost more. And considering that America's manufacturing base has all but evaporated, we buy just about everything from abroad. With our dollar worth increasingly less, virtually every industry will start to feel inflationary pressures, leading to layoffs and a further downward cycle for the economy.

Fourth and most fundamentally, our debt crisis has serious implications for America's status as a world leader. When Britain was the world's most powerful country, it was the world's leading moneylender. But when England became a debtor nation, their stature in world affairs rapidly declined. The lessons of history are clear: A nation's borrowing from abroad is generally a precursor to decline. Harvard economics professor, Benjamin Friedman, says in the TIME-BOMB documentary, 'Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. Today we are no longer the world's leading "