By CCN.com: Global debt now stands at a terrifying $243 trillion according to a report by the Institute of International Finance this week. That’s quarter of a quadrillion. We’re in the realms of the absurd.
This is unsustainable. And it’s the fault of a broken and irresponsible monetary system, addicted to printing money and issuing credit. It’s time to admit we need a new alternative. While it’s far from perfect, bitcoin offers a viable solution with its fixed supply and regulated output. It’s time for a revolution.
$243 TRILLION DEBT BOMB
The record figure stands at three-times the world’s total gross domestic product (GDP). In other words, it’s three times larger than the value of all products and services on the planet.
The figure peaked in the first quarter of 2018 when it hit $248 trillion. It has since fallen back slightly. The US is among the biggest offenders. As CCN reported, total US national debt hit $22 trillion this year.
Nonfinancial corporate debt in the US is now close to its pre-2008 crisis highs.
“THIS IS CLASSIC ADDICTION BEHAVIOUR”
On the surface, credit can help spur growth. Governments, companies, and individuals borrow money to fund economic development.
The problem comes when it doesn’t work. When there’s not sufficient growth, we borrow more. And more. As John Mauldin writes in Forbes:
“This is classic addiction behavior. You have to keep raising the dose to get the same high… Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used.”
WHY BITCOIN IS BETTER
Bitcoin’s fixed supply is an antidote to central banks’ addiction to printing money and encouraging debt.
Only 21 million bitcoin will ever exist. And they’re created according to a strict output cycle, regulated by math. The supply cannot be manipulated or increased according to the whims of any one government or bank.
As ShapeShift CEO Erik Vorhees explains, when the rising debt mountain implodes, people will flock to crypto in their hordes.
BITCOIN: A VIABLE ALTERNATIVE?
Bitcoin offers a sharp contrast to the fiat system. In our fiat system, central banks create money out of thin air in a process called quantitative easing. In simple terms, the central banks issue new money and use it to buy bonds and assets. This has the effect of introducing more money into supply, lowering the purchasing power of your money, and encouraging low-cost lending.
And when one country uses QE and low-interest rates to spur its economy, others inevitably do the same. It creates a race to the bottom where every country is flooding its economy with cheap money to stay competitive.
The result is a mountain of unsustainable $243 trillion debt – something most people don’t even know exists. It’s time for a new system. As Henry Ford said:
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Disclaimer: Mybitcoinshirts.com does not create any content. We share daily crypto articles in our almanac collection so our audience can get daily updates on cryptocurrencies. Mybitcoinshirts.com does not give any financial advise.