Capt Gidday, a few bits of housekeeping
US Centric (World series analogy) - Fully agree that this article is US centric, as is (unfortunately) a significant body of work, in print & internet. This is a function of the reserve currency system (Bretton Woods I & II). Under this system, whatever happens to the reserve currency affects everyone. Almost everything is traded
through US dollars in some way shape or form. Therefore, unfortunately for us, what happens to the US economy is critical to almost every economy that is tied into the reserve currency system (basically everyone).
Swarm USA - I visited that site incidently in preparing the formatting of the article. I make no representation for or against that site. I preserved the links merely for completeness. Even if it only has 1 member, does this detract from the message if it is a cogent argument?
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Though it churns out a sweet looking chart, does it actually mean anything?
Money in our current monetary system is actually debt - Money is loaned into existence (Government sells a bond to the Central Bank, the Central Bank then creates money out of thin air - holding government the bond as collateral - an IOU backed by governments ability to tax citizens. Government then spends money into the general circulation). Notice that the principle is loaned into existence, but not the interest. This is the fatal flaw in our current system. More money must be continuously loaned into existence to pay the interest on the previously created money. In other words, the money supply must continuously increase.
Consumers can only borrow so much. In theory, they can borrow so their entire income is spent on interest payments - debt saturation. Debt saturation for most people occurs before it reaches 100%, probably around 30~40% of their disposable income. But our system mathematically requires more money to be continuously loaned into existence to pay the interest on previously created money.
Once consumers are "tapped out", there is only one entity with the ability to continuously spend more than its income - the government through deficits. However, as government debt grows, the proportion of spending devoted to paying the interest continuously increases. In other words, of every additional dollar borrowed a greater proportion is devoted purely to pay interest on previous debt, and thus a smaller proportion enters into circulation. Eventually, for every dollar borrowed, none actually enters the economy - it simply pays the interest bill - this is debt saturation. That is what chart 1 is telling you. This is the point the US is rapidly approaching, and it is our problem because of the currency linkages through the Bretton Woods II system. (Its our currency, but your problem -- Treasury Secretary John Connally)
If you want to see how money is debt, this video explains it: