Today our economy is fueled by debt. Economy only growth when debt continuously introduced. This because of fiat currency system set in placed since 1971. Fiat currency is a currency pegged by government ability to service the interest of debt. It does not tie to any kind of commodities such as gold and silver. It make government , or the bank cartel to able to print money at will as long as the public sentiment confident on the government public to service the debt. It enable government for the first time be able to use future resources.
Debt is leverage instrument commonly known today. We buy a house, we leverage by ratio of 90:10. It introduced debt to our account at certain interest rate. It entrusted the debt to us for betting our future capacity to pay it off. It does make sense to most of public since for the first time, one does not required to save up to years of working, then only be able to buy a house at full price. It gratify most of people in instance, making such economy model so favorable on facet. However, the truth behind the debt economy model, it only really benefit the riches. As originally most of the real estate are owned by the riches, it enable the riches to command an future resources simply by selling it. In fact, the property price ever since increase at astronomical level, since suddenly, there are so many affordable buyer, but the available piece of real estate very much limited by its nature. And again, since most of the financial institution is owned by the riches, the riches could simply secure the debt they introduced to the public by making the piece of property they sold at the first place collaterally tie to the term and condition of the debt. It make public working for them forever by selling the property at high prices, with high interest rate.
Introduction of debt make flux of money supply into the market. Since the resources now is multiple by the factor of future available resources. it enable all financial institution to bloated. With so suddenly so much money and resource to be utilized now, which only get to be paid by future generation, gratification surge, private and public consumption raise to a whole new level. Economy was doing good, since now people spending like there is no tomorrow. Debt was pass on from one to another like the value of which ever transaction they are into it will continue raise forever. The truth fact was, people just in the game of switching debt chair hoping there is another fools willing to take the barton at higher price for the speculative instinct. Government and financial institution understood the game. Ever since all economy surge event solely due to more debt was introduced at sentimental value rather than real productivity innovation or technological innovation. So, in order to continue enjoy the gratification now, and knowing it will never required to be paid by now generation, government, politician and financial institution continue stimulate the market with policies encourage public to continuously put themselves into debt. Credit card, car loans, private loads, school loans, pay-it-later scheme become new economy trend. As baby booming age now all in its golden age of productivity and peace time after cold war, it create miracle economy booms like everyone is a genius by themselves.
Until recently, the debt game had come to the brink of total collapse. Unfunded government obligation such as medicare, retirement funds, unperformed private debt, overload government debts, with stagnant of industrial productivities, and negative demographic trends; the risks is imminent . Among all the issue created by the debt, negative demographic trend was the vicious of all. The debt model only will work when young generation has the capacity to service the debt passing down by prior generation. It is like running on the barton. Currently demographic trend shown that at most of the developed country, there are far less younger generation in population compare the the coming retirement of baby booming age generation. The old players exist at no new player to make the replacement will utterly cause the greatest disturbance to the stability of our current economy model. The riches are already exist the game since they introduced the debt game. The 90% of the rest of the public population is the one that is not prepared to such phenomenal catastrophe economy apocalypse . It will potential destroy everything we known of if the house of card collapse abruptly. It will create global social chaos. Unfortunately, government and banks cartel are not taking effective step to allow the economy cool down itself. They continuously feeding for debt to hopefully cure the debt. What do you think about our economy and social structure at our current economy trend? Unless new industrial innovation or some kind miracle global economical collaboration, we are going nowhere.
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