The thing about Ponzi schemes is that they have to keep on growing and if they don`t grow, they implode because you need a bigger supply of new investors to cash out the old investors.
Look at the U.S. Treasury Bond market. We have a 17 trillion dollar national debt (although that is just a tip of the iceberg, we actually have 100 trillion plus in total debt. 17 trillion is just where there are U.S. treasuries outstanding but the U.S. government has lots of obligations beyond the treasury debt).
But if you just focus on that, where does the U.S. government get the money to retire all the maturing bonds every year, trillions of dollars worth of Treasuries mature. The government does not have that money. It relies on new buyers to cash out the old buyers. And in many cases its the same holders, people that hold the debt, just roll it over, so we never have to pay it back.
But nobody wants to acknowledge the simple truth that repayment is impossible. All we can do is borrow more money to pay out the maturing debt but the debt stock keeps getting bigger and bigger because of the compounding interest and because the government borrows more more money every single year.
Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.
- ► 2017 (168)
- ► 2016 (252)
- ► 2015 (344)
- ► 2014 (429)
- China Announced The Mother Of All Tapering
- Will Bitcoins Be Worth Zero? They Might.
- The Original Currencies
- The Only Reason Anybody Wants Bitcoins
- An Economy That Lives By QE, Dies By QE
- Federal Reserve: They Have No Intention Of Taperin...
- Tapering & Tight Financial Conditions
- The Only Thing The Federal Reserve Fears More Than...
- Bitcoin Is The Wrong Vehicle
- The Simple Truth On The U.S. Debt: Repayment Is Im...
- We Are Going Get More And More QE Until We Overdos...
- Federal Reserve: No Impetus To Change Course
- Bitcoin: People Will Lose A Lot Of Money
- Yellen, Dollar Crisis & The End Of This Madness
- Yellen Will Compound The Mistakes
- Yellen: A Blind Leading The Blind
- Bitcoins Are No Alternative To Gold
- Bitcoins: A Modern Day Tulip Mania
- The Minute They Remove The QE, We Are Back In Rece...
- Video: Discussing Gold & Currencies With Dennis Ga...
- Euphoria: The Short Term Effect Of The Monetary St...
- We Are Not Getting Better Economic Data
- The Fastest Growing Industries Are Where Prices Ar...
- The Natural Consequence Of A Growing And Vibrant E...
- What Europe Needs
- Video: Federal Reserve, Cheap Money & Asset Bubble...
- The Federal Reserve Is Getting Ready To Increase Q...
- QE Is Like A Drug
- QE Is Preventing The Economy From Fundamentally Re...
- The Problem For The Market
- The Whole Rally In Stocks Is Based On QE
- Video: Discussing Monetary Policy With Ron Insana
- Eugene Fama Should Return The Nobel Prize
- Video: Economic Incompetence Is A Prerequisite For...
- Eugene Fama`s Neutral Events
- Video: Yellen`s Nomination
- ▼ November (36)