Illusions of Wealth

This article shares the perspective of a money manager who believes our last decade of GDP growth has been entirely due to increased spending on credit and therefore is fake, and we will have a bad awakening someday soon when international countries decide the dollar is not the best place to park short-term assets.
Arnott says the U.S. economy actually went off the rails more than a decade ago. What's more, many of us have failed to realize it because the most widely watched economic indicator, gross domestic product, actually tracks consumption, irresponsible or otherwise, rather than real wealth generation... "GDP that stems from new debt — mainly deficit spending — is phony: it is debt-financed consumption, not prosperity," Arnott writes. "Net of deficit spending, our prosperity is nearly unchanged from 1998, 13 years ago.",,,The worst case result could include the collapse of the purchasing power of the dollar, the demise of the dollar as the world's reserve currency, the dismantling of the middle class, and a flight of global capital away from dollar-based stocks and bonds.