SOS Myth on Debts

What is the the source of US Crisis?

Is it too much Debts?

Those are identifiable debts, consumer debt, corporate debt and federal debt, what about..

1. future debt on medicare, medicade and socialcare (USD104 trillion)



2. federal debt next 10 years circa (USD9.1 trillion)



3. unrecorded toxic debt (derivatives i.e. CDO, CLO, CDS, MBS) (USD200 trillion)

Can printing money solve the structural problem i.e. more debt to resolve the economy that already have too much debt?

Is bailout the solution, it only shifting private debt into public debt, with a hope that prolonging the debt will reduce drastically the Non Performing Loan. Will it work? Well it can defer it, but not eliminating it. Japan tried it, look at them, lost 2 decades. Japan is a Creditor nation, USA is a Debtor nation.

If Debt are used productively, i.e. used to invest into a cash generating assets for long term, it will value add to the economy.

What will happen when the Growth of Debt is faster than the GDP?

Is the GDP sustainable?

What about deleveraging? It may takes a while to unwind such a hugh debt (private debt of USD45 trillion)

Look at Japan, although they have shifted part of the private debt into public debt, the share market did not grow since 1989 to 2009. It is a myth that stimuli will resolve the too much debt issue. Something need to give. If it can be resolve so easily, every time we face with debt problem, we just print more money and problem solve.

The longer the debt is dragged, the longer the economy will suffer.