Most Americans have no idea how much economic trouble is heading our way. Most of them just assume that everything will eventually “return to normal” just like it always has before and that those running our economy “know what they are doing” and that we should trust them to do their jobs. Unfortunately, these beliefs are being reinforced by the bubble of false hope that we are experiencing right now. For example, it is being reported that weekly unemployment claims in the United States have fallen to a four-year low. That is a very good thing. Let us hope that unemployment claims go even lower and that the current period of stability lasts for as long as possible. We should enjoy these last fleeing moments of tremendous prosperity for as long as we can, because when they are gone they won’t be coming back. As I noted the other day, all of this false prosperity in the United States has been financed by the 15 trillion dollar partythat we have been enjoying. We are adding about 150 million dollars to our debt every single hour so that we can continue to enjoy an inflated standard of living. Unfortunately, nobody in the history of the world has ever been able to keep a debt spiral going indefinitely, and our debt bubble will burst eventually as well.
Sadly, when you attempt to end (or even slow down) a debt spiral the consequences can be extremely painful. Just look at what is happening in Greece. Several waves of austerity measures have been implemented, the Greek economy has been plunged into a full-blown depression and Greek debt is still going up.
The rest of the nations of the eurozone are also now implementing austerity measures, and most of them are also starting to fall into recession. The economic pain in Europe is just beginning and it will go on for quite a long time.
And eventually the United States is going to join the pain. Right now the U.S. government can still borrow trillions of dollars at super low interest rates thanks to games being played by the Federal Reserve. But it is simply not possible for this Ponzi scheme to last too much longer. When it ends, the pain will be extremely great.
And even in the short-term there are some extremely troubling signs for the U.S. economy.