Like a Mistress

Heat and humidity is our test today. At over 30 degrees, a gentle breeze is but a whimper in the wind in its efforts to cool us down.

Our mind strains for a distraction from the heat. Desperate, it drifts to our stowaway, like a mistress, a secret companion who is seductive and alluring. She is independent from our world, immune from the day to day burdens of reality.

Her only demand is to be taken to those dark and dangerous places where our passions have never seen the light, where hidden secret doors guard places we desperately long for but dare not dream of; a chaotic and carnal place.

Also desperate, hundreds if not thousands of counties have gone broke over the last century or two.  Like a mistress, this event is not that uncommon.

One way to judge if a country is doing an poor job of managing its fiscal policy and thus risking going broke is to compare its;

“Total Debt” to its “Gross Domestic Product”.

Gross Domestic Product is a very economic sounding word.

It is basically the total value of all products and services that has been sold (lets say in a year).

This ratio helps answer the question:

How much debt is too much debt?

If a country is approaching a 1 to 1 ratio, the size of its debt is starting to overwhelm its ability to serve that debt (pay back interest and principle).

It helps measure the risk that a country can not pay its debts back.

Of course, this is all hypothetical, because that could never happen to us…….