Higher public debt in the world economy threatens to collapse the financial system, writes the Hong Kong newspaper Asia Times on November 15 in the article “The reset is near.”
The global economy is “drowned in a sea of debt,” the newspaper writes. According to economists Luke Groman and Brent Johnson, debts have surpassed the critical level of $300 trillion, threatening to collapse the global financial system.
The G7 countries have accumulated a public debt that exceeds 100% in relation to their GDP. This is 2 times the stability level.
After the US abolished the gold backing of the dollar in 1971, US public debt increased from $371 billion (35% of GDP) to $31 trillion (126% of GDP). This has become a factor in the growth of distrust in world reserve currencies. This also explains why central banks around the world are actively buying gold.
2022 marks the highest gold purchases since 1967, totaling 673 metric tons.
The publication quotes the words of the legendary banker JP Morgan, who said that “gold is money, and everything else is credit”. Unlike paper money, gold has no default risk, the publication emphasizes.
Source: Rossa Primavera
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