Consumers, the US, and the rest of the world are all leaning on debt... what could possibly go wrong?
You’ve probably heard the story from long ago about the South Seas islander explaining his view of creation to the visiting missionary.
The world stands on the back of a turtle, he explained.
“Well,” ask the missionary, “what does that turtle stand on?”
“Another turtle,” explained the islander.
“And that turtle,” the missionary asked, “what does it stand on?”
“You can’t fool me,” said the islander. “It’s turtles all the way down!”
It’s a fun story, at least for those that haven’t heard it too often. But it’s not as fun when it is about debt. Today, it’s the debt all the way down.
That thought occurred to us when we learned that Americans are now carrying about a trillion dollars in credit card debt.
The Hill reports that the average interest rate on a new card is 24 percent, the highest rate since the 1980s, and that the typical household has a record $10,000 in credit card debt:
If that doesn’t sound like a lot of debt, try paying it off. At $250 per month, with 24 percent interest, you’ll be making payments until 2030, and you’ll spend a total of $20,318, twice what you owed. And that assumes you never use the card again.
“It’s hard to build wealth when you’re paying 20 percent interest every month,” said Ted Rossman, a senior industry analyst at Bankrate.com.
The nation’s credit card debt stands at $986 billion, according to the Federal Reserve. The figure has climbed by $250 billion in two years.
Some other estimates range higher. A WalletHub report put total card debt at $1.2 trillion at the end of 2022.
Total US consumer debt has hit a new record high of $17.05 trillion.
Then there is government debt, the much-debated statutory debt limit of $31.4 trillion. Total world debt is estimated to be $305 trillion.
The thing is that all that debt is balanced on a very small point of non-debt liquidity called gold. Gold is an amazing monetary commodity, but the load as shown in this graphic portrayal called the Exeter Debt Pyramid is growing fat too top heavy. Already it is wobbling. There is too much debt for such a small amount of real liquidity.
Of course, the gold will still be fine, it will continue to be money, but everything else from derivatives to government debt and paper money will come crashing down.
And that is just one more reason to take steps to protect yourself. Speak with a Republic Monetary Exchange gold and silver specialist today.