For 25 years, the US has been living on credit. Beginning with the Reagan years, the US tripled its national debt in only eight years beginning a flood of borrowed and printed US dollars that surged around the world.

Everyone thought that life was good and it was--at least for awhile. When the credit bubble began in 1982, the Dow was at 777. When the dot.com bubble burst in 2000, the Dow was at 11,700 and the US was the world's largest debtor.

 Credit is like money except the debt must be repaid and as long as the economy expands, debts can be carried and serviced. When the credit cycle ends, the economy contracts, debts cannot be paid, bankruptcies increase, unemployment rises and, if debt levels are too high, banks collapse and a depression can result.

To prevent this, governments have now bailed out the banks. Nonetheless, it is only a temporary measure as far more debt remains to be absorbed. We are experiencing the collapse of the greatest credit bubble in history. If you think it's over, just wait. The worst is still to come.

Darryl Robert Schoon

www.survivethecrisis.com

www.drschoon.com