Okay folks, in light of the massive looming debt crisis here in the United States, I'm inclined to do a little writing.
Most of us have read at least a little about the 14 + trillion dollar “debt ceiling” that the idiots in Congress are arguing over of late. It would seem that there is argument over whether that's a lot of money or not, whether they should be allowed to borrow more, and what the impact would be if this limit isn't increased.
I'm not really sure that I care to get into all of that at the moment because, quite frankly, I don't see a good end to it regardless of what happens. I did, however, do a little reading on debt in general.
So, when you and I go into debt, generally there is someone to whom we owe money, and the prevailing logic would be that this person or entity has money in abundance, and thus would have little or no need to incur any debt of it's own.
Of course, this is a logical fallacy. One being able to lend money has no correlation with one's own ability to stay out of debt.
In terms of the world debt situation, there seem to be very, very few countries that have little or no debt, and those countries are, in fact, not the kind of countries anyone would flock to for a loan. Inversely, even China (the largest single holder of U.S. treasury debt) has a national debt of it's own, officially equivalent to around 400 billion dollars (although I've read some articles pegging it closer to one trillion).
If every country on the planet owes money to another (or to many others) and no single one on the planet has any actual money to pay any of them, doesn't that kinda look like a really bad scenario waiting to happen? With all of this massive debt laying around, I would think that someone out there would have to have a shit-ton of money laying around, or at least a giant, debt-free, warehouse full of IOUs. But, thanks to the inventors of fractional reserve banking, this simply is not the case.
I've posted about this sort of thing before, but I can't speak out enough about it. Here's another, easy to find but probably often ignored, link:
This system, simply put, allows for a situation to exist where there is more debt in existence than there is actual currency with which to repay it. This is what leads to what I said above – everyone owes but nobody has any!
I guess I'm not supposed to have an opinion on that, huh... I'm just supposed to shut up and go to work. Speaking of which...
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