The Canary in U.S. Treasury Mines
A simple explanation of the next financial crisis in the United States.
Suppose you lost your job and you needed groceries to feed your family. You have a relationship with the local grocery store owner. He trusts you.
He allows you to charge your food. You promise the owner to pay later. He sets a 2% interest for the privilege of charging your groceries. He asks that you pay the accumulated interest every month until you repay your Total Debt.
But then something happens.
Your new job doesn’t provide enough income to pay back the store owner for last week’s groceries, and even worse, there’s not enough income to cover this week’s groceries.
However, as long as you continue to pay the monthly interest on the debt, the store owner lets you increase your Total Debt. So, on the 31st of every month, you make your Interest Payment on your Total Debt and keep charging your groceries.
Total Debt is all the money you owe the store, which continues to increase monthly as you buy more groceries and charge them.
Interest Payments are the monies you pay monthly in intere…
Keep reading with a 7-day free trial
Subscribe to Wade Burleson at Istoria to keep reading this post and get 7 days of free access to the full post archives.