Tag: US Debt

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A Grandfather’s wish of lower US debt

I recently remarked that I don’t wish my children to inherit the debts of our generation, if we can avoid it.  It seems that I, as a father,  are not alone in that thoughts.  I came upon this website by Michael W. Hodges,  The Grandfather Economic Report.

Each generation hopes their children will have more freedom and economic opportunity.    Certain trends threaten their future.

with precious childrenIn some ways we may be SHORT-CHANGING OUR NEXT GENERATION, but blaming it on others will not make it better. Acquiring knowledge and taking action is an individual responsibility.

“By highlighting economic threats to our young, actions may result such that negative trends become positive trends – – and my generation can become more proud of our bequest to the next generation.”

I have only this to say about his work:  READ IT.  It should be prescribed material for back ground reading.  It shows his excellent dedication and opens one’s mind to what is going on in many parts of the world.  He focusses on the situation in the US, but it can probably serve as a posterchild to many western economies.

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The rise of US Debt levels

After some further reading and research I came across this article from the New York times via a Google Search and blog article from Steady Blogging.

It is a great visual interactive graphic of the rise and history of US consumer debt levels.  I suppose this is a reflection of what happened across the world as well, especially in countries with high debt levels.  From the NYT link, click on “series index”, then click on “The American Way of Debt” and then click “Launch Interactive”.

It is debt and credit growth that spurred the massive asset price inflation of the past 2 decades, and it is the restriction of credit growth or deleveraging of these debt levels that will limit asset growth or even deflate asset prices world wide.  Investors and traders need to have more than one tool in their tool box to be able to take advantage of this and protect their own capital.