I urge you to read the New York Sun editorial titled “How Will We Survive the ‘Deluge of Debt’?”. We all know and talk about the mountain of debt that exists not only in the in the United State but throughout the world. It was my incredible honor, as Chairman of the FDIC, to work side by side with the legendary central banker now deceased, Paul A. Volcker, from 1978 when he was appointed by President Carter as Chairman of the Federal Reserve.
Through much of the 1980s, we worked to eradicate out of control global inflation caused by massive government deficits. We got it done but it was extremely painful for nearly everyone except the wealthiest people. Incredibly, governments have forgotten or ignored the lessons and for the past two decades have been on a crazy spending spree resulting in unimaginable levels of government debt.
From the article:
One can imagine how Noah felt when he was told to build his ark. Today, a “deluge of debt,” as the Financial Times puts it, threatens the world, with “unmoored” borrowing sparking market fears. Bloomberg sounds the alarm that in the weeks ahead, developed nations “will start flooding the market with bonds at a clip rarely seen before.” Government spending is eyed as a problem, but the root cause is fiat money that has loosed the debt floodgates.
Read the full article here.