There are people here who will love to say we are going to hell in a handbasket in the morning and give no rational for such a view. They then brag about buying shares in the afternoon They seem to think they have outsmarted everyone and manipulated the market. However how deluded are they. Whatever they have said has not made a jot of difference. Legends in their own lunch box, completely deluded individuals clearly in need of psychiatric attention. Some actually say we are going to hell in hand basket and give a reason This is great One of the arguments they use is that US debt is out of control Ok lets address this argument and have a rational discussion about debt
Ok lets start by looking at interest cover Interest cover = ebitda/interest expense
The bench mark for this ratio is 1.5 Should be more probably about 10 I reckon Ie ebitda should be 10 times the interest A red flag should be waved and alarm bells should ring at anything less than 1
Ok now what do you think the interest on US debt might be? Well it is $202,000,000,000 Agreed What is gross domestic product? $1,500,000,000,000 (roughly the clock is changing)
now lets assume this GDP/interest = interest cover What do we get??? $1,500,000,000,000/202,000,000,000 = 7.4
ok that means that gdp is 7 times bigger than interest
IMO, if GDP covers debt by 7 times then that countries economy is pretty safe.
