INTEREST RATES

Will You Survive The Coming Financial Crash 17
© 2005 Kent Daniel Bentkowski
This is not just some paranoid doom and gloom scenario, but rather, it is a fact that can
be easily proven simply by checking the various figures as indicated in this report.
All forms of debt in the USA currently equate to nearly 7% of the United States Gross
Domestic Product, which is the yearly value of all the combined goods and services
created here in the United States. This is significant, because once this debt figure
reaches 6%, that nation's economic infrastructure begins to collapse. This is a condition
that has never been seen in such an extreme, where the economic empire survives. This
is the point at which we currently find ourselves, and not a single nation in this world's
history that has walked this path before us, has survived such a heavy debt burden!
The reader may have noticed that the Bush Jr. administration appears to be reckless and
devil-may-care in their spending. Just in Iraq alone, more than one-fifth of a trillion
dollars has already been spent, and the U.S. Congress has just authorized another $80+
billion to be spent on permanent military bases that will be used to secure overseas oil
fields. Never has the USA acted so selfishly in favor of special interests --- and when it
comes time to share in the profits, the American citizen will be left holding out an empty
hand.
Currently, the total corporate, public, and private debt in the USA is $37 trillion dollars.
This is roughly $123,333.33 in debt for every man, woman, and child in this country of
300 million people (including the ten million plus illegal aliens). The truly sickening part of
this situation is that 65% of this debt has been created in just the past fifteen years
alone, from 1990 to 2005! By contrast, it took 214 years (1776-1990) to build a total debt
of $15 trillion dollars. This debt is now exponentiating itself, and at a point in the not too
distant future, this figure will reach the point of no return, where the figure will have
grown to such a fantastic amount that could never be paid off.
I spoke earlier about how it is the U.S. dollar that is the world's reserve currency, with all
global trading conducted in this currency. The great fear is that the U.S. will see the dollar
become so unstable that it will lose its' status as the global reserve currency. This was
exactly what happened to Great Britain, which had been the world's reserve currency prior
to 1949. The British Pound Sterling had been the standard, and all the U.S. is
accomplishing is repeating history.
INTEREST RATES :
Because the value of the U.S. dollar has dropped 44% since the summer of 2001, the
Federal Reserve has been forced to drop interest rates to its' current 46-year low. In an
effort to push the collapse off into the future, the dropping of interest rates to practically
nothing has created a frenzy of lending, as people rushed out to continue to live beyond
their means. With loan interest near 5%, those burned in the stock market went out and
invested in real estate. Of course, the banks used the lure of low interest rates to sucker
the ignorant and ill-informed into what is known as a variable-rate mortgage. This is a
good thing when interest rates are low, but increasingly bad for every point above 0%
that the interest rate increases.