U.S. Debt Tops $15 Trillion Mark Today

[banca rotta]

The number is so numbing...15 trillion?!

And this is just the debt. Fannie and Freddie are "off balance sheet" items which brings this debt to about 20 trillion.

Social Security, Medicare and Medicade bring the totals to almost 100 trillion.

The other one that few are talking about are derivatives which are about 700 trillion.

They call them "swaps" even though it works like insurance, but is not regulated like insurance.

What these credit default swaps do is pay the bad debts if the government was to default.

If you hold US debt and they stiff you and you bought credit default swaps then the institution you bought it from will pay you in full. The institution doesn't have this money so the fed will print it.

Bank of America just moved this stuff from Merrill Lynch's books to the bank holding company so they can go to the fed and get the money should they need it if the Euro zone nations default.

This is the story behind AIG a few years ago. AIG insured subprime mortgages so when Lehman collapsed AIG didn't have the money so they used FED loans and TARP funds to pay off their bad bets at OUR expense. They also got bonus's too!

Again there's 700 trillion of this garbage out there and the worlds GDP is less then a tenth of that.

[banca rotta]

National Deb $15 Trillion
US mortgage debt, $13.7 Trillion
Credit/Revolving Debt $800 billion.
Student Loans $1 Trillion
(not to mention all the various business debt not even included in this).

US GPD, $14.5 Trillion

Now, look at it this way
Mortgage Debt: $300,000
Credit card Debt: $65,000
Car Loans: $25,000

Annual Income: $95,000

In both instances, the person is bankruptcy

I am not one for economic apocalypse theories and what not, I don't think it will come to that; (food hoarding, and communities banding together in mad max like compounds for protection), but there must be a tipping point, or an event, that will cause a substantial change, and what the world will look like then is anyone's guess.

Here's another opinion on what things may look like. It's a chapter they felt they should leave out of this book because it's pretty scary stuff.

http://g-ecx.images-amazon.com/images/G/01/books/wiley/Aftershock_Amazon_Exclusive_Bonus_Chapter.pdf

[banca rotta]

BTW the current debt limit is 15194 trillion, so probably by January you will see the debt limit debates heat up again just like back in August.

I'm even more interested in seeing how this debate plays out since it's an election year.

You can bet that 2012 will start to feel like 2012.

Happy New Year in advance my fellow Americans just in case the SHTF sooner then later.

[GoingDown]

Watch what happens to Greece and Italy closely. They are NOT going to be able to pay back their debts.

My guess is that they are in for some rough times, and so are we, but Greece and Italy will still exist and still be relatively good places to live when compared to some third world country.

Is it going to be nice? No.

But is it the end of the world? No.

We'll get through this just fine, but prepare for it now. Don't be caught off guard.

We are a huge country with a lot of natural resources, a huge fairly well educated population, and a huge infrastructure that is amongst the best in the world. We will survive.

[banca rotta]

I agree with you goingdown. It will be rough for years to come just because the "Black Friday" crowd and the rest of the sheep that don't prepare for this may kill someone for their food which is what worries me.

Remember Iceland defaulted on their debts and they are in recovery just as some of us here defaulted and we are in recovery so there is long term hope.