53 trillion in debt outstanding in the economy as reconned by the Federal Reserve
Consumers have hit debt wall
Private business has hit debt wall
State and Local government have hit debt wall
Only Federal government debt and "bets on financial activity" are still going up – attempt to keep up the charade?
debt to GDP – very stable until mid 1980′s – had very low interest rates during 1950′s and 1960′s – did not have unsustainability – he blames deregulation
In 2000 per capita credit declined – Greenspan cranked open credit and created the bubble – then we ran into the credit wall
You can see the credit wall in the graph
How to get the economy moving again? How get debt ratio down to level of year 2000? – You would have to take 50% off of the debt outstanding or increase GDP significantly and thereby increase consumer income
What will the outcome of continuing to pull forward demand by borrowing by the federal government?
What is the outcome of placing ever larger bets on the price of commodities and equities by financial institutions?
There is no way to get the GDP to grow again without consumers income increasing
Appears to be a mathematically impossible attempt to stimulate the economy
To the individual – make sure you have a sturdy desk nearby that you can get under in case of economic earthquake.
I know alot of Argentinians – they have all been very nice people. That being said their naivite regarding the applications of morals in government is their undoing. Their theory propounded in the video is that their government sold them out. However I posit that your government will always sell you out. It is populated by people with large egos and very good self images. Would you expect them not to treat their wonderful selves to as many goodies as they can gulp down? I would also suggest for instance in the petroleum industry their real problem as a lack of a dynamic private sector petroleum industry. By in the beginning establishing a government petroleum company they eliminated the possibility of a dynamic private companies.
Its sad to see such good people put such belief in "morals" or what is "right". For this rarely has any bearing on the outcome. Only by playing the games of real politik can you maintain your freedom. Something Americans should consider.
This is more an economic and political history of Britain than anything else. The economic and political epochs of Britain are covered with nothing else talked about. Even cultural events mentioned have strong bearing on economics with an example being a massive party that was the prototype rave. Raves of this type are pay for entry models and more an economic effort than a party as much as they are talked up to the opposite.
Britain was on the edge of bankruptcy at the end of world war 2. They owed money to the USA and at the same time they wanted to undertake a huge welfare effort including socialized medicine. Sound familiar? Sounds like the USA to me in 2009 under Obama. If you have interest in economics you need to watch all 5 of these shows. In many ways the USA appears to be squarely on the same path as this has been empire.
…..And just so you know Britain paid off the last of the loans from this era in the 2000′s.
From video description: Britain in 1945; the country is victorious but nearly bankrupt. As Clement Attlee’s Labour government sets out to build ‘New Jerusalem’, Britain is forced to hold out the begging bowl in Washington. Though Ealing Studios produces a series of very British comedies and there is a spirit of hope in the air, the British people’s growing impatience with austerity threatens to take the country from bankruptcy to self-destruction.
A friend who is a professional trader has stopped trading stocks for the summer. This is not a lame 1 man day trader operation. This is a fully professional team with one fellow specializing in trading and the other focusing on the custom trading tools. Thus you can assume what affects them probably affects alot of other large firms.
Here is the break down of the situation in his words:
Here is just a small example of little things that nobody hears about:
When you’re primarily a liquidity provider and trying to make pennies and your effective tax rate quadruples it makes things difficult. Lots of liquidity is going to dry up for folks who want to invest too if they kill those responsible for the markets working under the veil of "punishing those evil wall street barons" For example say your total commission on making a penny is 0.35 cents. After raising the fees to 1.5 pennies you are losing money. Only so much of your commission is negotiated with your clearing broker. The majority is a passthrough SEC fees. Now assume you are expecting a winning of a trade if (roughly) normal probability distribution with 2 std. deviations of trades lying under 1.5 cps profit you have now shut down over 95% of your trading.
Remember those numbers are per 1 mil transacted easy to do when you’re making pennies providing lots of liquidity for other market participants. So now you can see these trades are poof !…gone.
The talking idiots like John Stewart can joke about how it is a "$20 increase they’re complaining about…greedy hairy backed old white republicans" Stewart is a paid fool whose job does not require any mathematical homework. This does not bode well for liquidity.
This is the organ chart of socialized medicine. It has kidneys, spleens, liver and onions and a whole lot of other organs your body does not.
Congressmen must be very good engineers. The reason I say this is because as an engineer I feel there is very little chance I could mathematically model the chances of success. In fact more often than not when machines are this complicated they fail often and hard. Thus I can only conclude that congressmen are smarter than I am. In fact they must be demigods. A god something bigger than Mercury and less than Jupiter. And on a final note you maybe wondering where you are on this map of the corpus governmentus. You reside on the rings around Uranus. And thus you can assume the worse. The flavor of the day will never change.
Mike "Mish" Shedlock is author of one of the most read economics blogs on the Internet: Mish’s Global Economic Trend Analysis [http://globaleconomicanalysis.blogspot. com/].
Mish gave an @Google talk, sharing his perspective on the state of the global economy (housing, the stock market, commodities, etc.) He also provides his interesting story about how he started blogging, and the impact that it has had on his life personally and professionally.
In January, Time.com ranked his site the #1 based on a rounded set of criteria [http://www.time.com/time/business/artic le/0,8599,1873144-3,00.html]. From the article:
"Although Mish is not an economist by training, he adroitly gets into the thick of economic data. Mish uses observations made by those in major media, so-called experts and government officials and serves up analysis based on his impression of their relevance and validity. The author is not afraid to attack conventional wisdom."
Clue: Federal Reserve prints up some monopoly money and gives it to the banks and maybe some third party investors to get the banks out of trouble. The taxpayer ends up with IOU’s for this monopoly money.
We are accustomed to thinking of Germany as the bad guy as afterall this is the country that brought us Hitler. A tyrant and a lout.
However turnabout is fairplay and now we have Angela Merkel acting in the name of freedom and the small guy everwhere. She is holding firm against a third wave of stimulus. This appears to have the lefties in a tizzy as it stands to make Obama look bad. Germany by taking its knocks stands to recover sooner than the USA. In addition the huge wave of inflation that will hit the USA when the economy finally does recover will not hit europe as hard. I grieve for what Obama and the left are doing to the republic. It is clear after the boy-king with sagging man boobs our country will never be the same.
I am however proud of the USA in one respect. We successfully turned Germany into a country with a leader that is confronting Obama’s tyranny of the money printing press. This printing press is taking us into slavery and corroding the bonds of interpersonal trust that make us a cohesive society. Obama is the American Robert Mugabe complete with dellusions of grandeur.
Obama is refusing to accept repayment of TARP monies by banks trying to repay them. This of course leaves Obama with a stick to wield over these same banks heads. But imagine if a single banker were to load of his repayment cash into an armored car and personally drive it up to the federal reserves doors? With a little news coverage pressure would be immense on Obama to accept repayment. It is a situation Obama can only lose and the banker would over night become a folk hero and gain an entry in the history books. Free us from this madman Obama’s clutches. This child will run the country into the ground.
However in the case of the United States government we need to shut down their ability to borrow money from foreign governments. Incredibly after bilking foreign investors with various imaginative forms of investment paper the dollar strengthened as the world paniced. Governments and individuals around the world mistakenly thought the USA was the safest place for their money. But after Obama was elected was this true any more? Clearly not as he is spending every buck that comes into the country and then some. In doing so he is increasing government size at cancer like rates of growth. There is only one way to shut this down and that is for the rest of the world to stop lending us money.
I hope they stop soon. It will be bad news for the strength of the dollar. Here in Brazil I won’t like the fact that it takes more to buy the necessities of life but then that will just be my part. For all the pain it will cause the USA will end up being a better place.
