US
Debt: Look At It This Way By Adrian Ash, BullionVault
- Posted Friday, 15 January 2010
Seven
ways to put the United States' national debt into perspective...
The SHEER SIZE of the US government's debt hasn't put off
new bond buyers so far in 2010.
You've got to wonder what kind of news – or debt – it might
take to deter them.
In just two days this week, the Treasury issued $61 billion
in new debt – twice as much money as Japanese
households put into their domestic equity funds during
all of 2009, itself a 50% jump from 2008.
Yet one "big
bidder" still opted to lend the federal government
one fifth of that sum, according to bond analysts speaking
to the Financial Times at least. And overall, the government's
creditors offered to lend Washington three times the money
it sought.
Now, if the Treasury didn't need that $61,000,000,000 to
cover
6.3 days of spending, the money raised in new bonds between
Tuesday and Wednesday this week could cover 12 days of interest
due on the outstanding debt, already running above $12.3
trillion and outweighing the market value of every
company listed on the New York Stock Exchange.
Put another way, the United States national debt is greater
than the GDP forecast this year for Japan, China, Brazil and
Canada added together. (That's excluding the $107 trillion
of unfunded
liabilities yet to come, of course.) If today's lenders
ever see their money again, they could just about buy all
the gold ever mined in history – all 165,500
tonnes of the stuff – twice over at today's prices.
Or they could simply pay twice today's gold price, of course.
Repaying the US national debt looks a struggle, however.
Settling $1 per second – rather than racking up an extra $37,132
every second, as the federal government's scheduled to do
in 2010 – would take until the start of February A.D. 392,372.
Settled for cash, and piled
up in $1 bills, the current US debt would reach to the
moon...and back...and back to the moon again...and then round
the moon's equator ten or perhaps 20 times, depending on how
much you squashed them.
Or to put the US national debt into historical perspective
– a very historical perspective – the US government has borrowed
the equivalent of $2.46 each and every day since the beginning
of time...last computed to have occurred some 12.7
billion years ago, back when $2.46 really meant something.
For creationists sticking with Archbishop
Ussher, that's $2 billion per year since God said "Let
there be light"...back when fiat really meant something,
too.
And lo! The bond market still kept on buying.
Adrian Ash
Formerly City correspondent for The Daily Reckoning in London
and head of editorial at the UK's leading financial advisory
for private investors, Adrian Ash is the editor of Gold News
and head of research at BullionVault – winner of the Queen's
Award for Enterprise Innovation, 2009 – where you can buy
gold today vaulted in Zurich on $3 spreads and 0.8% dealing
fees.
Please Note: This article is to inform your thinking, not
lead it. Only you can decide the best place for your money,
and any decision you make will put your money at risk. Information
or data included here may have already been overtaken by events
– and must be verified elsewhere – should you choose to act
on it.