Point of No Return
With every bailout, debt goes up, as do taxes. As long as we can pay the interest on our debt through our taxes, the system works. For example, if you earn a $1,000 a month and your debt payments are $500 a month, things are fine. But if your debt payments exceed $1,000 a month, your personal financial system begins to break down. That is where the world is today.
1. Inflation is essential for war.
Throughout history, governments have financed wars not through taxes but through inflation - the hidden tax.
2. Inflation leads to a loss of freedom.
When inflation increases, governments step in to take more control of the economy, which leads to losses of personal freedom. That is why, when the economy finally collapses or goes into hyperinflation, dictators and despots come to power. Famous past dictators and despots are Hitler, Napoleon, and Mao - all of whom came into power during unstable economic times.
3. How do you measure the point of no return in an economy?
The economists state that it occurs when:
a. Debt exceeds 73 percent of GDP
b. Debt exceeds 230 percent of external exports
"Regulators almost certainly will be unable to prevent future financial crises, so the focus should be on structuring the financial industry so that it can better absorb unexpected blows." Alan Greenspan testifying before the bipartisan Financial Crisis Inquiry Commission.
When the economy goes past the point of no return, leaders take control, often by imposing wage and price controls.
The most important thing you can do is think for yourself. Don't get caught up in the belief that things are fine and the government will save you.
1. Inflation is essential for war.
Throughout history, governments have financed wars not through taxes but through inflation - the hidden tax.
2. Inflation leads to a loss of freedom.
When inflation increases, governments step in to take more control of the economy, which leads to losses of personal freedom. That is why, when the economy finally collapses or goes into hyperinflation, dictators and despots come to power. Famous past dictators and despots are Hitler, Napoleon, and Mao - all of whom came into power during unstable economic times.
3. How do you measure the point of no return in an economy?
The economists state that it occurs when:
a. Debt exceeds 73 percent of GDP
b. Debt exceeds 230 percent of external exports
"Regulators almost certainly will be unable to prevent future financial crises, so the focus should be on structuring the financial industry so that it can better absorb unexpected blows." Alan Greenspan testifying before the bipartisan Financial Crisis Inquiry Commission.
When the economy goes past the point of no return, leaders take control, often by imposing wage and price controls.
The most important thing you can do is think for yourself. Don't get caught up in the belief that things are fine and the government will save you.
