The Federal Reserve notes that total debt in the United States in the first quarter of this year was 360 percent of gross domestic product, exactly where it was in the second quarter of 2008, before the collapse of Lehman Brothers sent the financial system into a swoon from which it has still not recovered.
The world has gone nearly $7 trillion into debt in the meantime. Add together the deficit spending and the stimulus packages the world's governments mobilized since October 2008 and the total is $3.2 trillion. Add on top of that the total amount of liquidity creation by the various central banks through the printing of money and Qualitative Easing and lending against toxic assets and there is another $3.6 trillion -- mostly from the Fed and from Chinese banks.
By the end of next year, it is very likely to that all the Group of Seven economies, except Canada, will have total government debt levels equivalent to their annual GDP.
Get the picture, this is a train wreck waiting to happen with tremendous consequences to the USD and other fiat currencies.
Read this excellent editorial here.
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