The US is replete with debt. In order to experience continued growth in our Gross Domestic Product, the economy must generate increasing amounts of debt at an exponential rate.
  • For Each $0.50 growth of GDP, Total debt grows by $2.5
  • Most of the debt growth has been funded by increases in pools of mortgage money borrowed from foreigners thru GSE's and Mortgage pools and growth of home equity loans and consumer debt.
  • Exponential growth of debt started in early '90's fueled by growth of GSE's and consumer borrowing.
  • To continue current growth of GDP, debt growth must continue at current accelorated levels.
    • Debt Components
    Total in relation to GDP has moved in a predictable cycle over the past century. We have still not seen the peak last visited in the mid '30s
    Total personal bankruptcy filings continues to set records each year. It is now more commmon to file bankruptcy than to file divorce. Total divorces are not expected to exceed 1,000,000 per year, bankruptcies now exceed 1,600,000.

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