Groovygirl is sure you have heard that the United States debt to GDP ratio is not that bad. Actually, if you leave out certain sectors, that is true. But if you put all government, individual, corporate debt and GDP together in one graph, it looks like this.
Zerohedge called this a scary chart. Yes, very frightening to say the least. Later, zerohedge updated the very scary chart to a very, very scary chart as we would reach the cross-over point on All Hallows Eve 2011.
This chart is the very definition of debt saturation.
The chart from the IMF is not pretty. This is not sustainable past a few years. Groovygirl is not sure why the IMF thinks that US GDP is staying flat or going up in the future. GG doesn’t agree.
Either debt goes down or it collapses because it can not be serviced (let alone paid back). When debt collapses, GDP collapses because the United States GDP is fueled by debt. Vicious feed back loop.
Last time gg checked (I think it was a 2010 number), global debt to GDP (throw in China and India) ratio was 40% and growing. That is not sustainable either. The countries with little debt will grow tired of “bailing out” ( buying new debt) of the debt-ridden countries.
muses of the moment 
Hi Groovy Girl,
Just wanted to let you know I appreciate all your time and energy you put into your blog and wanted to share something important about whose been selling UST last week in the tune of about $70 Billion–There has been lots of speculation on who sold UST but I have confirmation that it was indeed China. How do I know this? Just know Im not one to burn bridges. Dont have to believe me but though this info was timely and important as this is a shift away from US debt. Besides sharing is caring
“China sold but Japan bought UST. China Aug Holding of US Treasuries USD1.137trln vs. USD1.1735 trln…but Japan Aug Holding of US Treasuries USD936.6 bln vs. USD914.8 bln”
Hope this bit of info helps, cheers.
Comment by Hi — October 20, 2011 @ 3:23 am
Thanks, Violet for that valuable information. We usually can’t confirm info on UST until 30-90 days later. It seems they are on a selling trend here. Good to know. Japan doesn’t have any money, so, Ben’s US dollars must be “funneling” through Japan to buy UST.
gg
Comment by totallygroovygirlfriday — October 20, 2011 @ 8:36 am
Your welcome, thanks for reading!!
gg
Comment by totallygroovygirlfriday — October 21, 2011 @ 7:27 pm