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Monday, November 14, 2011

The Debt Wall - Society - Economics

Have you ever heard of the term debt wall? You have likely heard of debt and a wall. But what does it necessarily mean when you put both of these terms with each other. The following document will provide you with insight as to what a debt wall is and why many economic experts feel we are about ready to hit this wall.

Debt Wall - it is an expression that makes a lot of sense. You borrow too much (debt) therefore you hit a wall of no return (bankruptcy.) The USA, along with the rest of the universe, is nearing a limit of debt in which the world economy is unable to handle. We are going to reach a debt wall. And running into this wall will most likely be really agonizing. Just how hurtful will this national debt disaster turn out to be? Well, it could mean raging rates of interest, hyperinflation, enormous unemployment, unprecedented bankruptcies, and instability to our sovereignty.

Possibly you have heard of the Great Wall or even the Berlin Wall. The Debt Wall will almost certainly have quite as much of a historical importance as these incredibly significant walls. The Debt Wall indicates the turmoil of the world financial state.

Let's look somewhat deeper within the reasoning behind the debt wall. We will reach it the moment the entire world runs out of liquid funds and so, the inability of countries to fund the deficits being run up by governments. Essentially, no capital means bankruptcy.

According to Mark Nuttle, the world has no more than 18 months until we hit this wall. Marc Nuttle is a known expert in international trade and economic policy. He has served on the Industrial Policy Advisory Committee for Trade and Policy matters for the United States Government under President Ronald Reagan. In that capacity he wrote and advised the Reagan Administration on worldwide trade and General Agreement on Trade and Tariffs (GATT) for 6 years. He also served as legal counsel to President Reagan's United States Synthetic Fuels Transition Team. Marc Nuttle has also advised the countries of Bulgaria, Ukraine and Russia as well as corporations owned and governed by the People's Republic of China.

Due to the US government reliance on foreign debt as well as other investments to subsidize our nation's budget deficits, the nation's debt has hit a critical point - a debt wall in which absence of foreign capital flow decreases the need for the local currency. Again, how can this wall really affect the United States? Think devaluation - the devaluation of the US dollar. This is extremely bad. Said in a different way, the debt wall occurs when there is an increased supply of currency put together with an increased need that causes devaluation of currency, which in turn causes countries not to be able to afford to buy imported products.

Facts don't lie. Did you know that several economists think that the world's capacity of sustainable debt at 70% of Gross domestic product is $42 trillion? And did you know that the current world's debt totals $58 trillion, 97% of the GDP. A lot of economic predictions anticipate that by 2013 world deficits will exceed a debt of$70 trillion or 116% of the world debt to Gross domestic product. Again, the debt wall is just months away.

The realities of such an economic crisis can be observed on the streets of Greece. Other nations along with the US are simply steps from this dreadful financial situation. The debt wall is real.

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