Excerpt from Puplava:
financialsense.com
As I was reading through the news, one article on Bloomberg hit me right over the head! “The Securities and Exchange Commission proposed that U.S. companies be required to disclose an estimated $3 trillion in off-balance sheet debt, a reaction to Enron Corp.’s collapse.” The off-balance sheet debt is carried by SPE’s (special-purpose entities), which are usually partnerships, trusts or corporations controlled by the parent company. The article went on to say, “These SPE’s help corporations get more favorable terms on loans while keeping the debts off their books.” HELLO!!! Don’t you think investors would want to know how much debt their companies are holding? We’re talking $3 trillion. To put it into perspective the article said, “By comparison, the size of the U.S. corporate bond market is about $2.3 trillion, according to Lehman credit indexes.” By admission of the SEC, the hidden debts of Corporate America exceed the entire U.S. corporate bond market.
We flippantly throw around these big numbers of billions and trillions. Bear with me to get a minds-eye for what a trillion dollars looks like. A fresh bundle of a hundred, one-dollar bills is roughly a half-inch thick. With 24 bundles you get a stack one-foot tall. A mile is 5,280 ft. x $2400/ft. = $12,672,000 per mile. Now take $1,000,000,000,000 divided by $12,672,000 = 78,914 miles. A stack of one trillion dollars would be 78,914 miles high! Stack up $3 trillion in hidden corporate debt, and those paper-thin dollars would get you to the moon from here! That’s a BIG number to be excluded from the balance sheets. |
