Historic Debt will lead to Inflation

 

Published November 22, 2004

I've talked about the debt and inflation before, but the following might scare you:

Although the level of deficit is the largest in history, it is not the largest when measured as a percentage of GDP. The current deficit is about 4.3% of GDP. This is high by historic standards, but has been exceeded in 6 of the fiscal years since 1962. BUT the private sector is larger than it has ever been, and issuing more debt than ever before. Total $US debt when combining private and public debt is about $35 trillion, or 300% of GDP.

Don't think that inflation is soley a function of public debt. No, foreign investment is a competition among all capital securities, and it is net US debt interest owed as a percentage of GDP (as well as US GDP as a percentage of global production, and other factors) that underly inflation.

Labels: , ,


E-mail this article:
Comments:
Post a Comment

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Google
Web
Blog

[Back to Top]
Copyright © Dan Von Kohorn, 1999 - 2008. All Rights Reserved.
Article content is licensed under a Creative Commons License except where noted.
Creative Commons License

Investment Commentary
Use Maxmind
This page is powered by Blogger. Isn't yours? Blogarama - The Blog Directory

 

Important Legal Information: This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.