US Debt Crisis

Today, US is the largest debtor nation in the history of the world with total debt amounting more than US$18 trillion dollars, ie. 18,000,000,000,000 and still growing (see debt figure below in real time from usdebtclock.org).  

Strangely however, many people do not seem to be concerned with this fact, perhaps assuming that this problem will somehow go away one day or perhaps because the attention is primarily on the eurozone.   But one has to ask, being the biggest debtor today in the world, can the US government service its debt to its creditors? As the biggest economy in the world and the US dollar as the reserved currency, what will happen if she default on her debt like Greece?

Well, at the moment, US has not defaulted because it is still able to pay its creditors by printing massive amount of US dollars.  But will this be sustainable?  How bad exactly is the US debt? This video provides a simple layman explanation.


US Debt Crisis Explained


Believe it or not, we are now experiencing the effect of the massive US dollar printing which is Inflationary.  Last year 2011, Singapore's overall inflation rate was 5.2%.  (See official stats)   Essentially, if you are keeping your cash in the bank and earning less than 1% interest, you are losing your purchasing power due to inflation.

But what exactly is inflation? Many layman like myself used to think that inflation is simply the rise in the price of goods and services.  Is that really the case? Well, at least that is what the media constantly tells us.  But in reality, these are just the symptoms of inflation.  The 3-min video below will give you a clearer understanding of inflation and its causes:

What is inflation? What caused inflation? 




What causes the Financial Crisis in 2008? Will there be a repeat of another Financial Crisis in a bigger scale? This video explains and analyses it all.