by Steven St. Angelo, SRS Rocco:
The U.S. financial system is in serious trouble and this one chart confirms it. Investors who understand the negative consequences of this chart would be buying physical gold and silver hand over fist. Unfortunately, Americans have been put to sleep by the Mainstream media as they continue to report that “business as usual forever and everything will be okay.”
However, the opposite is the case as the U.S. economy and the financial system continue to disintegrate under the forces of massive debt, zero interest rates and a collapsing energy industry. This is not a situation that will continue for many years or decades. This will likely collapse much sooner than most Americans realize.
Why? Because of the evidence shown in the chart below:
This chart taken from the Political Calculations blog, reveals the exponential increase in U.S. debt as well as GDP – Gross Domestic Product. Most individuals have seen charts of U.S. debt going back decades or even to the 1930’s. However, this chart goes back all the way until 1791.
You will notice as the debt increased at an exponential fashion, so did U.S GDP. Which means our GDP growth is really fictitious or based on the leveraging of debt. The chart above represented data up until 2010. I manually added the U.S. debt and GDP trend lines to the chart below to show the present situation:
According to the official figures from the Federal Reserve (GDP) and Treasurydirect.gov (debt), the U.S. GDP hit $18.4 trillion Q2 2016 while total debt is now $19.5 trillion. The interesting thing to understand about the chart above is the “Exponential Growth Rate” insert chart. I originally thought the U.S. debt was heading up in an exponential fashion… but didn’t think it was that quite severe.
However, if we look at the Exponential Growth rate chart, we can clearly see that the rising debt and GDP trend lines are heading higher FASTER than an exponential trend. This is very bad news for Americans rich and poor.
Let me briefly explain what an exponential trend is. It is the doubling of a figure every time period. For example, the Rule of 70 states that $100 at an annual interest of 7% will double in ten years to $200. It will continue to double every 10 years ($400, $800, $1,600, $3,200, $6,400 so on and so forth).
U.S. Public Debt Is Skyrocketing Faster Than The Exponential Growth Rate
I decided to take the doubling of U.S. debt (every 10 years) starting in 1971, which was $398 billion, and compare it to the actual figures:
If we take the $398 billion in U.S. debt in 1971 and doubled it every 10 years, this would be the result:
1971 = $398 billion
1981 = $796 billion
1991 = $1,592 billion
2001 = $3,184 billion
2011 = $6,368 billion
2016 = $9,552 billion (half the time period)
2021 = $12,736 billion
Because we have only gone half way through the ten-year time period for 2016, the exponential debt increase was only $9,552 billion ($9.5 trillion). However, U.S. total debt has ballooned to $19.5 trillion. The U.S. debt has increased $10 trillion faster than the doubling exponential function. This is off that charts.
Furthermore, here is the same chart including the estimated U.S. public debt for 2021:
According to figures from statista.com, they estimate total U.S. debt will reach $23,574 billion by 2021. Now, let’s compare that to the next doubling of debt to reach $12,736 billion in 2021. Again, the exponential doubling trend is still $10+ trillion lower than the estimated debt for the United States in 2021.
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