MAY 25, 2018
Take your medicine in the moment. Feel the pain as it comes. Pay what's due up front.
This timeworn lesson is the source of all the world's current debt woes. Postponing today's pain by allowing consumption via debt spending, global economies run via future production that demographics indicate will not materialize at all
You put off the trip to the dentist as long as you can. A routine checkup becomes a root canal. Ignoring the problem is both the worst solution and our current course of action, but there's no turning back the clock.
Raising the interest rate will not help the problem, yet keeping rates low only encourages more eventually unserviceable debt.
Debt, and the ability to service it, is the problem.
Fed's Dilemma: Raising the interest rate will not help the problem, yet keeping rates low only encourages more eventually unserviceable debt.
ECB's Dilemma: In case you did not notice, the ECB's dilemma with Italy and Greece is even worse than the problem the Fed faces.
ORIGINAL SOURCE: Fed's Dilemma: Debt-to-GDP Ratios Dramatically Understate the Debt Problem by Tom Lewis at The Gold Telegraph on 5/12/18