Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise donít have cash yet.

Whether itís wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not.

The problem is that many people, businesses, and governments borrow because they can. Itís been possible in the last decade only because central banks made it so cheap.

It was rational in that respect. But it is growing less so as the central banks start to tighten.

Earlier this year, I wrote a series of articles (synopsis and links here) predicting a debt ďtrain wreckĒ and eventual liquidation. I dubbed it ďThe Great Reset.Ē I estimated we have another year or two before the crisis becomes evident.

Now Iím having second thoughts. Recent events tell me the reckoning could be closer than I thought just a few months ago.

Debt Doesnít Fuel Growth Anymore

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.

Thatís how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them.

That makes sense. A country with a larger GDP can carry more debt. But that is increasingly not what is happening.

http://news.goldseek.com/GoldSeek/1543308060.php