The world economy looks as if it is about to collapse under its weight of debt.
193 out of 198 countries are in debt. (Source - CIA)
Here is the same list on Wikipedia, kindly arranged so you can play around with the list per capita and as % of GDP.
From this, we learn that the debt is not owed by one country to another (otherwise it would be 50/50, wouldn't it?). The debt is owed by 193/198 countries to the banksters.
This is all down to the way money is created. Make no mistake, money is being created. World money supply is increasing. It had a doubling time of 10 years in the last decade of the 20th century. Which means that someone is creating new money. That someone is the banks, who make the vast majority of new money. (Governments get to make a tiny amount of new money as notes and coins: in the UK that is 3% of the total).
Banks create money by issuing loans, in the following way:
- They issue money to the borrower's account, and sets up an equal and opposite sum in their own accounts.
- The borrower goes away and earns (in the real economy) money to pay off first the interest on her loan, and then the original capital sum.
- When the capital sum is finally paid off, the two accounts cancel each other out.
- In this process, the bank has acquired an extra amount of money, the interest, which varies with the terms of the loan. For example, a straight loan of $10,000 at 5% over 10 years will earn interest of $2,728.
- That $2,728 has gone from the real economy into the bank.
- Either the real economy has lost $2,728 to the bank, or other people have borrowed it from banks, creating more debt.
- If it had been withdrawn from the economy, it would be deflating, which it isn't (generally). Therefore it is being borrowed, repeating the whole cycle.
- Therefore all money in the economy has its origins in debt - the capital sums borrowed (which will be annihilated when repaid) and the interest, which represents other monies borrowed into existence.
- Therefore debt increases inexorably in the system, until a critical point is reached when it is realised that debt becomes unpayable.
The whole economic system is based on debt. We are in a vicious circle, working to pay off debt. If money is growing, debt must grow. Money has grown, debt has grown, and now it is crunch time.
Clearly, this is a vast oversimplification. There are a multitude of other factors at work, but this is the logical and necessary core of the problem, despite all the obfuscation that will no doubt ensue in the comments below.
I hope that helps.
My advice: dig up your lawn and plant vegetables.