The Current Economic Earthquake
Twenty years ago, Larry Burkett published a book entitled “The Coming Economic Earthquake”. In his book, Mr. Burkett sounded dire warnings about
the dangers of runaway US government spending, and the very-great temptation to “monetize” the government debt by purchasing it with money printed for that purpose.
Looking at what is going on with our out-of-control government spending, and the money printing presses that are running at full capacity – it would seem Larry Burkett’s dire prophecies are in danger of being fulfilled. Exactly what did he predict?
- Government spending would grow until it was out of control. Clearly, this has occurred.
- The government would be unable to sell all the debt, so it would be “monetized”; i.e. it would be purchased by new money printed by the Fed for this purpose. Whatever the reason, this is clearly underway with the Federal Reserve’s “Quantitative Easing” program.
- The interest payments required to service the national debt would grow until they exceeded all available tax receipts. We don’t appear to be here yet, but will this remain true when interest rates begin to rise?
- Hyperinflation would be triggered. People’s savings would be wiped out, and those on fixed incomes would not be able to meet their living expenses. He noted that this has been the case in EVERY historical example that we have of governments that fund their debts by printing money.
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