The end of systematic evil?

I love charts and graphs. I am a huge fan of info graphics – and I became fascinated by some lately as they scare the hell out of me.

1) Chart number one: Total US government debt – the chart below ends at 2008 . We reaching the “debt ceiling” 17th of October 2013: nearly 17 trillion USD in US government debt. That would be written out: 17,000,000,000,000.00

You do not need to be an economist to understand that it is an pretty ugly situation. Want to know more about the US federal debt? Click here.


2) Chart number 2: US Consumer debt – If chart number one didn’t scare you enough – have a look at the US consumer debt. Federal debt does not include all the credit card debt (this is ex mortgage debt) etc. – here we are adding USD 3 Trillion to the equation.



3) Chart number three – US housing prices. We all know the term housing bubble and what went on between 1998 and 2008 with housing prices. Here a nice chart:



I could go on with charts about the dollar, charts about mortgage, charts about median income….

4) just one last chart: US stock prices vs bond



And then a recent comment from a financial analyst from Blackstone:

We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity,” Joseph Baratta, The Blackstone Group’s global head of private equity.

The point about all the charts and numbers is that we have seen a tremendous increase in spending in the past 10-20 years – but we have not seen any increase in productivity nor salaries. It just does not add up. Common sense can not justify why consumers should be allowed to borrow so much money. They will not be able to repay the debt. They will default eventually. The US government will default as well.

They have overspent in the last 20 years. They have fought very expensive wars: on drugs, in Afghanistan, in Iraq costing them Trillions and Trillions they did not have. They have bought homes at artificially high prices. Home prices go up if there is a sudden scarcity due to influx of people to an area. Did the population in the US double in the last decade? No.

What justifies the sudden increase in stock prices? Increased productivity? No. Increased profits? Maybe but if people would not have  been able to lend so much money, they would not have been able to buy so many expensive gadgets like Apple IPhones and Samsung Galaxies.

Summing up: The US is broke and will default soon – the government and their citizens. We are standing on the edge of a huge devaluation of housing prices, stock prices, bond prices.

Do not get me wrong. I am very happy and glad about all the new technologies and invention (and I am huge fan of Apple). I am also happy that the banks are constantly borrowing me money without blinking with an eye to fund my gadgets, my expensive house, my vacations although I know I really can’t afford it. We all (= 98% of us) can’t afford it. And we need to realize that we can’t continue with this systematic evil.

The point is that we created a system where it is very easy to forget that we are all living and spending beyond our means. Plus, we are creating an ecological disaster on our planet. I enjoyed the ride. It will end soon. It was great. It is a shame that it is over. I will miss all the innovations from Apple and deep in my heart I do not want it to end. I want it to go on forever. But I know we can’t. We can’t keep consuming and consuming and consuming and even more consuming (and eating up this planet). I have been actively participating in this systematic evil. I am co-responsible for it. We all are. The point is, when you are in  it, you do not realize it. You just do what you think you must do. You tend to blacken out that it just can not add up at the end and you keep hoping it will never end knowing it must end. And then it will end. The big questions: what will happen next?

The other questions are: Did democracy fail? Did capitalism fail? Is democracy possible without free market capitalism?

I wish everybody would have had the attitude of my parents. Humble, very low spending, no debt, saving every penny.

Let’s go and buy some more senseless stuff on TellSell – you can pay in three installments.

Keep your health. That is is the most important thing. And make love regularly.

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