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Total Global Debt Has To Double To Over $200 Trillion By 2020 To Preserve Economic Growth

Tyler Durden's picture





 

A brand new study released by the World Economic Forum (WEF) in collaboration with McKinsey (which is a must read if only for its plethora of charts which we are certain will be used and reused in thousands of posts and articles over the next year), finds that while global credit stock doubled from $57 trillion to $109 trillion in just 10 years (from 2000 to 2010), it will need to double again to an incredible $210 trillion by 2020 in order to provide the necessary credit-driven growth (in a recursive way, whereby credit feeds growth, and growth requires additional credit issuance) for world GDP to retain its current growth rate. And while the goal seeked conclusion is obviously nothing but propaganda for the banking syndicate meant to facilitate the need for endless credit issuance spin (after all how on earth can world GDP growth occur based on something productive like manufacturing when there is only $100 trillion of free cash chasing worthless and rapidly amortizing assets), the study did warn (timidly) that leaders must be wary of new credit "hotspots" of excess lending, as the world emerges from a financial
catastrophe blamed in large part "to the failure of the financial
system to detect and constrain" these areas of unsustainable debt. In other words: credit doubling blew up the world financial system, but if you promise to behave this time, go ahead and double the world debt again.

Where does the WEF see the bulk of the credit growth coming from? Why Asia of course.

Rapid credit growth is forecast in developing markets, which will add almost US$ 50 trillion to their credit stock by 2020. China’s credit demand will lead global credit growth: it will require US$ 20 trillion more credit in 2020 than in 2009, with 80% of that growth going to the wholesale segment. In developed markets, including the large Western economies, most of the growth will come from the government segment. In North America alone, the value of government bonds is expected to grow by US$ 12 trillion to 2020. Deleveraging in overheated retail and wholesale segments of the developed world will be significant.

$20 trillion more credit in 10 years in China? That may, just may, lead to a slight pick up in food prices...

On the topic of hotspots, or areas where credit growth may be problematic, the WEF basically says that virtually every area that needs to double (or more) its credit in the next decade, could go boom.

Even though some economies will deleverage over the coming decade, the analysis projects a significant number of credit hotspots across the world in 2020 – including retail credit hotspots in countries representing almost half of global GDP. Government credit hotspots are projected for countries representing 13-14% of world GDP – although Western Europe will be more vulnerable. In wholesale credit, Asia and Western Europe will be the main drivers of hotspots in 2020 (Exhibit iv).

Yet the only relevant take home message is that absent reignition of the securitization markets, which as BofA, JPM and Citi are all finding out now the hard way, may have been nothing but massive fraud from the get go, in which nobody really tracked who owns what in that 4th and 5th layer of leverage, growth will simply not resume.

The need to revitalize securitization markets. Without a revitalization of securitization markets in key markets, it is doubtful that forecast credit growth is realizable. There is potential for securitization to recover: market participants surveyed by McKinsey in 2009 expected the securitization market to return to around 50% of its pre-crisis volume within three years. But to rebuild investor confidence, there will need to be increased price transparency, better data on collateral pools, and better quality ratings.

In other words, the world must give up all prudent hope to having a vibrant and stable credit system, and embrace without any doubt the same ludicrous model that led to the kinds of synthetic idiocy that virtually blow up the world when it had $100 trillion in debt, if we even hope to have the kind of growth that explosive credit growth (and nothing else!) afforded the world in the past ten years. Just imagine how this will play out when the total debt is $200 trillion instead. And one wonders why all the institutional whores are against the gold standard, with its fixed limitation on the issuance of credit-money. So much better to live on imaginary promises of repayment, coupled with guarantees of 4% GDP growth in perpetuity until the world certainly blows up all over again, only this time only Mars would be able to bail out earth. No seriously.

And while the assumptions and conclusions of the report are predictable from a mile away, the real goodies are the charts. Here are the key ones:

This is the broad summary of where we global credit stock was, where it is, and where it is supposed to go ($213 trillion) just to keep GDP flat!

"If it worked in the past, it must work in the future" - the rules of thumb that must be true in order to allow an exponential growth curve in global credit stock:

Nothing to see here- global Debt to GDP is expected to continue growing from its current base of about 200% (higher for OECD than total):

A forecast of growing credit stock by region indicates that China, Africa and the ROW better be equipped to handle the required pick up in lending:

Since past is prologue, here is how historic relationships between GDP/capita and total debt/GDP have worked out in the past. Take home: only massive (and preferably cheap) credit leads to growth:

Here is where the bulk of the bond issuance will have to come from: guess what - taxpayers will be on the hook, as the vast majority has to be sourced by government bonds: Austerity... really?

And where total bank lending is supposed to originate from...

In the process of doubling global debt, there may 'even' be "hotspots" - here are the key regions and the primary drivers for debt growth: retail segment credit, wholesale segment credit, and of course, government segment:

Going back to the 2010 word of the year, contagion, here is who the WEF believes are the riskiest countries. Not surprisingly, the US is front and center...

For those who believe that Europe is far riskier than the US, here is a more granular look at the Eurozone's biggest contagion risks:

Lest we forget, massive credit growth leads to unfortunate side-effects... Such as sovereign bankruptcy, and near total financial armageddon:

But what is certainly the most important chart, and the one we will have much more to say about in the future, is the consolidate global balance sheet of financial institutions. The only thing worth nothing is the tiny sliver in the bottom left of sources of wealth, affectionately called "equity" - this is the error buffer currently built into the system. And somehow this 3% of total wealth uses is supposed to preserve systemic stability when total global debt doubles from current levels.

Full report:

 

 


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Wed, 01/19/2011 - 14:24 | Link to Comment thepigman
thepigman's picture

Won't happen. Global Japan, bitchez.

Wed, 01/19/2011 - 14:32 | Link to Comment midtowng
midtowng's picture

Much worse than Japan.

Japan had a high savings rate and trade surpluses. Plus they were able to export many of their deflationary problems.

We are talking a global problem, so none of those things apply here.

The problem is that we live on a debt-based global currency. Eventually we either have to default. It's the problem of compounding interest. It can't go on forever.

The thing is that a debt-based currency is exactly what the bankers worked hard to put into place, and what they rely on to maintain their power. So they aren't going to give it up without a fight to the death.

Wed, 01/19/2011 - 15:25 | Link to Comment Michael
Michael's picture

I made this Youtube video with pieces from part 3 of the BBC documentary, “The Power of Nightmares”. It explains the Precautionary Principal and where it came from, that has caused so much damage to our way of life and the world. This will tell you why the eco-fascists, Neo-Libs, and Neo-Cons use their apocalyptic predictions.

The Precautionary Principal-International Banking Cartel Brainwashing
http://www.youtube.com/watch?v=4GIkWuuq45I

Wed, 01/19/2011 - 17:09 | Link to Comment hedgeless_horseman
Wed, 01/19/2011 - 18:07 | Link to Comment chopper read
chopper read's picture

great post.  thank you.

Wed, 01/19/2011 - 18:35 | Link to Comment dogismyth
dogismyth's picture

The precautionary principle is a paradigm that should NEVER be used as the driving factor in action.  I worked in the environmental management arena for decades under the premise of the precautionary principle.  The absurdity that stemmed from this principle were Orwellian, just as they are today.  For example, we had hypothetical people digging in the ground to a depth of 6 feet and eating 100 mg of that soil a day.  That was the scenario the USEPA wanted adopted for all assessments for industrial waste released to soil.  It was fucking ridiculous and some companies had to spend millions to cleanup for a potential exposure that had a likelihood of occurring of about 1 in a billion.

So its a useless tool when logic, science and reasoning are thrown out the window in order to protect some  unnamed hypothetical person doing some irresponsible and highly improbable act.

Your video was good.  Blair is a crook.  Plain and simple.  He knows what he is doing.  All royalty and bloodlines need to be captured and placed on a island for there (and our) own good.  They are ruthless, arrogant, uncompassionate, selfish and fucking insane through their inbreeding.  90% of the worlds problems would be gone like that...(i just snapped my fingers)....if these evil fucks were exiled somewhere and the world was put into the hands of humanitarians, unbiased scientists and artists.

Thu, 01/20/2011 - 22:20 | Link to Comment chopper read
chopper read's picture

thanks for posting, mate. 

Wed, 01/19/2011 - 15:30 | Link to Comment TheDavidRicardo
TheDavidRicardo's picture

Thank you, thank you , thank you.

If I hear one more person say that the US is not Japan (implying that the US is in better shape), I'm going to kick them in the balls or vagina!

Wed, 01/19/2011 - 15:44 | Link to Comment SheepDog-One
SheepDog-One's picture

Or both! Depending on what part of town youre in!

Wed, 01/19/2011 - 14:25 | Link to Comment JW n FL
JW n FL's picture

Luquidity BITCHEZ!!!!

Wed, 01/19/2011 - 14:32 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Is there an 'app' for this 200 trillion?

I would like to see this impending 'issue' be resolved via the use of a simple iPhone app.

Wed, 01/19/2011 - 14:26 | Link to Comment aerojet
aerojet's picture

Damn, I only came over here to post some witty "_____, bitchez" comment and got beat out twice over.  How about, CREDIT, BITCHEZ!!!! ?

Wed, 01/19/2011 - 14:43 | Link to Comment centerline
centerline's picture

After reading a little more of the material, I would go with "New World Order, bitchez!!!"

Wed, 01/19/2011 - 15:47 | Link to Comment Mudflap
Mudflap's picture

BLOW, BITCHEZ!!

Wed, 01/19/2011 - 14:27 | Link to Comment JW n FL
JW n FL's picture

"Going back to the 2010 word of the year, contagion, here is who the WEF believes are the riskiest countries. Not surprisingly, the US is front and center..."

 

how much of that metric is pass thru from the other idiots around the globe?

Wed, 01/19/2011 - 14:28 | Link to Comment stormsailor
stormsailor's picture

why is there such a divergence on the dji and the s&p?  usually runs about 10:1.

Wed, 01/19/2011 - 14:31 | Link to Comment TruthInSunshine
TruthInSunshine's picture

The Bernank and his minions realized a while ago that it is easier to target 30 stocks for hot beef injections, to get them into the green (or at least keep them from falling as far into the red), and thus give a warm, fuzzy 'wealth effect' feeling to the masses, than to do so with 500 stocks.

Wed, 01/19/2011 - 14:35 | Link to Comment thepigman
thepigman's picture

+100

Wed, 01/19/2011 - 14:39 | Link to Comment thepigman
thepigman's picture

Step right up, sir, and get your

jacked-up, ramped-up equities from

the PDs.

What could possibly go wrong?...it's the Dow.

Wed, 01/19/2011 - 15:06 | Link to Comment Hephasteus
Hephasteus's picture

Every dog show has a best of breed and best of show category.

Wed, 01/19/2011 - 16:05 | Link to Comment rubearish10
rubearish10's picture

IBM is a heavily weighted DJIA stock.

Wed, 01/19/2011 - 14:29 | Link to Comment Yancey Ward
Yancey Ward's picture

Realistically, there are net debtors and net creditors.  At some point, enough net debtors reach the point where they decide that they spend enough of their working day servicing their debts and no more.  When that point is reached, they will do one of three things, default, stop taking on debt, or actively start taking it on with every intention of defaulting.

Wed, 01/19/2011 - 15:00 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

At some point, enough net debtors reach the point where they decide that they spend enough of their working day servicing their debts and no more. 

In 2010, an incredible 9.42% of all housing units in Nevada were foreclosed upon.

http://finance.yahoo.com/real-estate/article/111848/the-eight-states-running-out-of-homebuyers?mod=realestate-buy

Wed, 01/19/2011 - 15:07 | Link to Comment SilverRhino
SilverRhino's picture

When that point is reached, they will do one of three things, default, stop taking on debt, or actively start taking it on with every intention of defaulting.

 

And if Joe6pack follows the lead of the .GOV?   Option 3 will win out every time.

Wed, 01/19/2011 - 15:09 | Link to Comment Financial_Guard...
Financial_Guardian_Angel's picture

+100

Then it's the net creditors turn. They will have options too. Take it up the a$$, restructure the debt, or call in the military to ensure all assets now belong to them. Which do you think they will choose??????

Wed, 01/19/2011 - 14:31 | Link to Comment Duffminster
Duffminster's picture

Is the growth measured in inflation adjusted dollars and if not, perhaps closer to $1 Quadrallion in new credit will actually be required to compensate for massive hyperinflation???

Duffminster

Wed, 01/19/2011 - 14:31 | Link to Comment plocequ1
plocequ1's picture

200 Trillion? Meing. Thats alot of money

Wed, 01/19/2011 - 14:35 | Link to Comment JW n FL
JW n FL's picture

it is almost 1/4 of JP Morgans Global Holdings.. in one market place, not gross.

Wed, 01/19/2011 - 14:38 | Link to Comment plocequ1
plocequ1's picture

2020. Hopefully by then i will be sleeping with the fishes

Wed, 01/19/2011 - 14:42 | Link to Comment JW n FL
JW n FL's picture

i hope not... live long and prosper!

Wed, 01/19/2011 - 14:32 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Debt instruments of mass destruction.

Hard to make someone deep in debt become a responsible citizen.

Wed, 01/19/2011 - 15:04 | Link to Comment wisefool
wisefool's picture

Not a problem. Just tell that to the OBGYNs so they spank/stamp american future taxpayers with their 10 digit SSNs. 10% more patriotic Keynesianicity!.

Wed, 01/19/2011 - 14:36 | Link to Comment tonyw
tonyw's picture

It's obvious now why Tunisia and Egypt are having problems (see the fifth chart) - they don't have enough credit to buy things so people are rioting!!! Just slip them all a few large ones and they'll be happy as Larry won't they?

But seriously why do they keep calling it credit when it's a debt.

 

Wed, 01/19/2011 - 14:48 | Link to Comment DonnieD
DonnieD's picture

credit to the bank, debt to the poor people that need it.

Thu, 01/20/2011 - 11:17 | Link to Comment Monday1929
Monday1929's picture

"floated a bond issue" sounds much better than

"mired themselves further into debt"

Wed, 01/19/2011 - 14:41 | Link to Comment bugs_
bugs_'s picture

save that ponzi

 

Wed, 01/19/2011 - 14:42 | Link to Comment jus_lite_reading
jus_lite_reading's picture

Why wait? Print NOW. That way every man has a castle and a roast duck on his plate.

Wed, 01/19/2011 - 14:43 | Link to Comment JW n FL
JW n FL's picture

Mc-Mansion... not castle thats so last century..

Wed, 01/19/2011 - 14:44 | Link to Comment TruthInSunshine
TruthInSunshine's picture

McMansions with Chinese Drywall/Sheetrock and shitty ass construction.

Wed, 01/19/2011 - 15:11 | Link to Comment JW n FL
JW n FL's picture

I do feel for all those poor souls out West in Broward and Miami...

Wed, 01/19/2011 - 14:43 | Link to Comment Sudden Debt
Sudden Debt's picture

Didn't OBAMA sell out the US for 45 billion to the Chinese today?

Which state did they get?

Wed, 01/19/2011 - 14:46 | Link to Comment NotApplicable
NotApplicable's picture

Please be California!

Wed, 01/19/2011 - 14:53 | Link to Comment Yancey Ward
Yancey Ward's picture

We tried to give them Illinois, but the state employee unions objected under 5th Amendment grounds that it was an illegal taking and they required just compensation.

Wed, 01/19/2011 - 14:44 | Link to Comment TruthInSunshine
TruthInSunshine's picture

A fiat tree in every yard!

Wed, 01/19/2011 - 14:45 | Link to Comment NotApplicable
NotApplicable's picture

QE to infinity!

ZIRP to the rescue!

 

Wed, 01/19/2011 - 14:45 | Link to Comment gwar5
gwar5's picture

We can double it ....easy!

Wed, 01/19/2011 - 14:46 | Link to Comment irishlink
irishlink's picture

and then the politicians can blame the citizens! Barrosa went ballistic on the poor IRISH MEP in the European parliament today when he suggested that the high interest rate on the Irish bailout loans were to bail out the TBTF banks around the world. OH we are a nasty piece of gum stuck to their shoes now!

Wed, 01/19/2011 - 14:46 | Link to Comment Rainman
Rainman's picture

The worldwide credit future is so Rumsfeldian : There are things we know, things we don't know and things we don't yet know we don't know......or something like that.

The only thing we know we know for sure is that E-Z promiscuous lending is the golden egg but sadly the goose is in menopause. 

Wed, 01/19/2011 - 14:49 | Link to Comment buzzsaw99
buzzsaw99's picture

Cool. Does anyone know how I can buy me some Facebook?

Wed, 01/19/2011 - 14:49 | Link to Comment Bastiat
Bastiat's picture

And all that debt will be paying interest -- to whom?   The ponzi debt fiat money machine will meltdown before 2020.

Wed, 01/19/2011 - 14:51 | Link to Comment cartonero
cartonero's picture

Lost a bet?  Just keep going double or nothing!  Just think what this proposal would do to the price of tungsten.  Tungsten, bitchez!

Wed, 01/19/2011 - 14:55 | Link to Comment thepigman
thepigman's picture

What a friggin mess. And the bulltards

sing: "It's all good....it's all fine..."

Ben will save the world"

Wed, 01/19/2011 - 14:59 | Link to Comment thepigman
thepigman's picture

Tyler, why are all the high IQ folks

here reading ZH and the low IQ folks are out

getting big bonuses to go along with

the scam? Totally corrupt and baffling.

Wed, 01/19/2011 - 15:01 | Link to Comment thepigman
thepigman's picture

Hope you have a plan for when they come

for your website, as they will. No truth telling

allowed.

Wed, 01/19/2011 - 15:47 | Link to Comment SheepDog-One
SheepDog-One's picture

Well as I sit here watching Tunisians hanging corrupt cops dressed in plain clothes I can only conclude that those who think theyre smart and sucking up the fat bonuses meet with less than desirable demises!

Wed, 01/19/2011 - 15:06 | Link to Comment topcallingtroll
topcallingtroll's picture

Support St. Vincent McCrudden.

Wed, 01/19/2011 - 14:59 | Link to Comment andresesp
andresesp's picture

according to http://www.usdebtclock.org/ US National debt alone is 55trn. Can the 100trn estimate for the World be right then, so 55% is in the US? Anyone with an educated guess?

Wed, 01/19/2011 - 15:48 | Link to Comment SheepDog-One
SheepDog-One's picture

$1.2 quadrillion derivatives caused debt alone.

Wed, 01/19/2011 - 18:19 | Link to Comment chopper read
chopper read's picture

CONGRATULATIONS!! We taxpayers are all 'reverse-millionaires'!! Unfunded liability per taxpayer = $1,013,701. (bottom right hand corner of link): http://www.usdebtclock.org/

Wed, 01/19/2011 - 15:05 | Link to Comment taint
taint's picture

since everyone is a debtor, who gobbles up 100 trillion more in credit?  

The only way this occurs is through worldwide deficit spending - we have to meet those medicare and SS entitties

Wed, 01/19/2011 - 15:20 | Link to Comment A_MacLaren
A_MacLaren's picture

Ben, Ben, the printing man

If he can't do it, no one can.

Wed, 01/19/2011 - 15:04 | Link to Comment topcallingtroll
topcallingtroll's picture

I suppose it doesnt matter that none of us yet have the tranny balls to.do anything but moan. It looks like debt will topple the system for us.

Wed, 01/19/2011 - 15:27 | Link to Comment thetruth
thetruth's picture

+1

Wed, 01/19/2011 - 15:04 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Damn that finite planet with it's finite resources and VERY REAL cost of creating capital.

Wed, 01/19/2011 - 15:17 | Link to Comment Gully Foyle
Gully Foyle's picture

LawsofPhysics

"Damn that finite planet with it's finite resources and VERY REAL cost of creating capital."

 

Why yes indeedy. But there is loads of rescources in space.

I've often thought that the main race we haven't established colonies on the Moon or Mars. is the Gold rush that would put common men in direct conflict with TPTB. TPTB would have no control.

Fuck it would be a Heinlien story.

Wed, 01/19/2011 - 15:19 | Link to Comment LawsofPhysics
LawsofPhysics's picture

What? A gold rush on mars?  I am in.

Wed, 01/19/2011 - 15:05 | Link to Comment Watauga
Watauga's picture

It seems to me that what we are reading here suggests that there is a lot of money to be made in all of this.  The question is "how?"

Most ZH readers foresee a total economic, social, and political collapse--TEOTWAWKI.  Is that really going to happen?  Sure, anything's possible, but is it not more likely that many people will figure out how to make money in these times--folks from those who start their own small businesses meeting customer needs to those knowing what stocks or bonds or other financial instruments to invest in.  Even in the worst depressions and recessions in American history, we never a true TEOTWAWKI moment (unless, of course, you count FDR's revolution as an economic, social, and political collapse).

Or, is the normalcy bias just getting in the way of my opportunity to see what you all are seeing?

Wed, 01/19/2011 - 15:08 | Link to Comment thepigman
thepigman's picture

Sure, but our institutions are scammers

and control the mainstream media.

Wed, 01/19/2011 - 15:09 | Link to Comment TruthInSunshine
TruthInSunshine's picture

TEOTEAWKI has already happened.

*The end of the economy as we knew it.

 

Down the rabbit hole, to who knows where, we go from here. Wheeee!!!!

Wed, 01/19/2011 - 15:14 | Link to Comment LawsofPhysics
LawsofPhysics's picture

I agree, even when there is a plague, the coroners do quite well.

Wed, 01/19/2011 - 15:13 | Link to Comment SilverRhino
SilverRhino's picture

>>but is it not more likely that many people will figure out how to make money in these times

They will, but it will be in the black market.   Too many barriers to competition have been established in the regular market.

Wed, 01/19/2011 - 15:14 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Bingo!!!!  We have a winner!

Wed, 01/19/2011 - 15:33 | Link to Comment chet
chet's picture

We're talking about a mountain of baseless money creation, so the finance industry will do very well.  Those who can take thin-air money (easy credit) and quickly convert it into a form that they get to keep will do well. 

The financial industry gets to take a % of the thin-air money right off the top as compensation.  Stick it in your personal bank account and presto, no one can touch it.  Your employer (the bank) has created thin-air money and you get to shove some of it right into your pocket as real money.

Those further down the line have to borrow it, and thus pay it back with interest.  So those who have a solid way of borrowing and making a yield which is greater than the interest due will do well.  Think hedge funds, and flippers of whatever the hot asset happens to be over the next decade.

Small business people who can put credit to productive use can do fine.  They also hire people and tend to actually produce something out of it.  That is the proper use of credit.

The problem is that small businesses can't borrow the amounts discussed here.  There just won't be enough new consumers to support all that new business because most people don't work for banks, and don't own a business, and are making less money than they were five years ago. 

The solution over the past decade was to get the consumers themselves to do all the borrowing.  But they don't put the money to productive use.  They buy stuff that depreciates immediately while the debt remains, and even grows with interest.

So who will use all the credit discussed in this post?  I'm guessing they hope that consumers in the developing countries will go down the exact same path we all just went down.

Wed, 01/19/2011 - 15:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Send the bill to;

Mars (a.k.a. the RED planet)

Solar System HJFG1653

Fourth Planet from the Sun

 

Makes you realize how stupid economics really is now doesn't it?

Wed, 01/19/2011 - 15:11 | Link to Comment chet
chet's picture

Nice of them to basically admit that modern economic growth is simply borrowed from the future.  They seem to be missing the implications of that, however.

Wed, 01/19/2011 - 15:13 | Link to Comment Gully Foyle
Gully Foyle's picture

"global credit stock doubled"

 

I'm confused. Isn't credit just fiction based on a real world asset?

Wealth uncoupled from real world assets is just illusionary.

Since you are creating the illusion of wealth via credit, then why is there a problem creating ever greater illusions?

 

 

Wed, 01/19/2011 - 15:18 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Sure, it works until it doesn't and real commodities required for survival become limiting.  As an "educated species" should we not care about that peril, regardless of how far into the future it may or may not be?  Just saying I would much rather have currency re-attach itself to reality so that is does not "snap" back when my great grandchildren are alive.  By "snap" back I mean the richest man in the neighborhood is suddenly the one with fresh water, canned goods and an arsenal. 

Wed, 01/19/2011 - 15:16 | Link to Comment thepigman
thepigman's picture

Hi, I'm Ben Bernanke and I'm running

this scam for YOUR benefit, capiche?

Please be cooperative and give me your utmost suspension

of disbelief. Thank You.

Wed, 01/19/2011 - 15:19 | Link to Comment Jerry Maguire
Jerry Maguire's picture

It's either $100 trillion more debt - which is insanity - or no debt at all - a jubilee - which sounds insane but isn't.  And also $27,300/oz gold or thereabouts. 

There are about six posts about the constitutional amendment to accomplish this here:

http://strikelawyer.wordpress.com

Wed, 01/19/2011 - 15:17 | Link to Comment Goldenballs
Goldenballs's picture

Roll those Panzers,get the bank notes printed faster,sod the value or inflation,just print.

Wed, 01/19/2011 - 15:18 | Link to Comment the not so migh...
the not so mighty maximiza's picture

200 Trillion is not my debt,  I pay my taxes. F-OFF global begger

Wed, 01/19/2011 - 15:19 | Link to Comment praps
praps's picture

Are we still talking trillions?  What happeend to quadrillions?

Wed, 01/19/2011 - 15:22 | Link to Comment thepigman
thepigman's picture

Hi, I'm Ben Bernanke.

Do me a big favor and buy some stock

from an insolvent primary dealer for

40% more than it's worth. It's good

for the American economy. Thanks

and God bless.

Wed, 01/19/2011 - 15:24 | Link to Comment thepigman
thepigman's picture

Don't worry, I've got your back. I

studied the Depression.

Wed, 01/19/2011 - 15:28 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

Hi, I'm a fascist douchebag

Not doing so means you are anti business, anti capitalist, and thoroughly, un, american.

Wed, 01/19/2011 - 15:26 | Link to Comment aquagreen73s
aquagreen73s's picture

In case anyone is wondering, quadrillion comes after trillion.

Thu, 01/20/2011 - 00:04 | Link to Comment Milestones
Milestones's picture

What comes after quadrillion? Hell as fast as we went from A billion, then 100 billion to half a trillion, to multi-trillions we'll need to know what that denomination is to post within the next few months.

Time fly's when you're having fun!      Milestones

Wed, 01/19/2011 - 15:33 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

dick cheneys bank now open for business. subprime is our game.

Wed, 01/19/2011 - 15:35 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Obama: Today we are all Chinese. I know that sounds funny. 

Wed, 01/19/2011 - 15:38 | Link to Comment What_Me_Worry
What_Me_Worry's picture

Let's just call it an even quadrillion and be done with it.

Wed, 01/19/2011 - 15:39 | Link to Comment pazmaker
pazmaker's picture

so who are the creditors???

Wed, 01/19/2011 - 15:40 | Link to Comment clinger9
clinger9's picture

Sweet, cant wait, corn at $10 bucks a ear

Wed, 01/19/2011 - 15:43 | Link to Comment outamyeffinway
outamyeffinway's picture

Complete waste of fucking time; the whole report and any consideration given to it. In a world with declining oil production, where will the credit come from? Leverage against gold and silver.....??

Gold=$150,000/oz

Silver=$15,000/oz++

Wed, 01/19/2011 - 15:44 | Link to Comment Revolution_star...
Revolution_starts_now's picture

Market question.

I pulled up my stock account and noticed something strange on my screen. I called tech support, we cleared my temp internet files and cleared my cookies. Went back and looked again, it's still red. Needless to say tech support seems dumb founded. Not sure what can be causing this problem, I have rebooted several times and it's still not fixed. Anyone why the market is shown in red today?

Wed, 01/19/2011 - 15:50 | Link to Comment rubearish10
rubearish10's picture

Tech Support says it'll be fixed by 4:00pm EST. 

Wed, 01/19/2011 - 15:55 | Link to Comment Revolution_star...
Revolution_starts_now's picture

Yep just spoke with Habeeb at tech support. He tells not to worry that I should just BTFD, and it will be fine in the morning. So what exactly is BTFD? and I have older PC with windows XP, can I BTFD with that or do I have to upgrade to windows 7 so I can BTFD?

Wed, 01/19/2011 - 15:58 | Link to Comment rubearish10
rubearish10's picture

BTFD is likely the best bet. How sad. This was once once fun.

Wed, 01/19/2011 - 20:04 | Link to Comment unununium
unununium's picture

This is not the dip.

Wed, 01/19/2011 - 15:52 | Link to Comment SheepDog-One
SheepDog-One's picture

Maybe the dip buyers (Bernanke and Geithner) got kidnapped or somethin? Nothing else I can think of to explain why the dip isnt getting bought hand over fist.

Wed, 01/19/2011 - 15:56 | Link to Comment rubearish10
rubearish10's picture

this is only to keep us interested. One Red day will keep us around. On the other hand, a string of days like this may put some "two way" market traders to get involved again. Perhaps but AYS, Big Ben and Timmay will have something to say about that, no doubt.

Wed, 01/19/2011 - 15:52 | Link to Comment rubearish10
rubearish10's picture

add,,,today is your last chance to cover any shorts at a smaller loss, hee hee.

Wed, 01/19/2011 - 15:56 | Link to Comment thepigman
thepigman's picture

I am the bernanke and have your back

in this scam as I have studied and

and studied and studied depressions. Please buy, support the

American economy, and God bless.

Wed, 01/19/2011 - 16:03 | Link to Comment thepigman
thepigman's picture

You have my personal guarantee that

my PDs minions can keep stocks elevated 40%

above fair value. What's not to like?

Wed, 01/19/2011 - 16:07 | Link to Comment thepigman
thepigman's picture

Support my banks, PLEASE.  They need

the trading revenue as nobody wants

a loan.

Wed, 01/19/2011 - 16:04 | Link to Comment AlexanderKZ
AlexanderKZ's picture

They did not mention the concept of declining marginal productivity of debt. So their "forecast" is  junk in pseudoscientific wrapping

Wed, 01/19/2011 - 16:07 | Link to Comment outamyeffinway
outamyeffinway's picture

Exactly.

Wed, 01/19/2011 - 16:17 | Link to Comment trav7777
trav7777's picture

yeah and THEN, global credit would have to double AGAIN to fucking $400T by 2030!  This is the very ordinary nature of geometric growth mathematics!

holy shit, batman...math works in an unexceptional manner

Wed, 01/19/2011 - 16:23 | Link to Comment blunderdog
blunderdog's picture

I'll do my part.  Someone give me a loan for a billion or so. 

I'm good for it.  These are economical boom-times.

Wed, 01/19/2011 - 16:41 | Link to Comment proLiberty
proLiberty's picture

When governments create $200 Trillion out of thin air the main consequence is to reduce the amount of wealth that each currency unit describes.   This is without consequences, for when government prints money, it gets to buy things and pay wages with it, which accrues power to it.  But people who have lent to others (mainly government) on a long term basis find their wealth has been deliberately sapped away.  To a lesser extent, people who are on the wrong end of any long term contracts are also the unwitting souce of the wealth transfer that a rise in wages and prices begets.  This is theft by dilution, no less than when the bartender waters down the whiskey to sell more drinks or when the phramacist waters down the chemotherapy drug to yield more doses.

 

Wed, 01/19/2011 - 17:20 | Link to Comment Apostate
Apostate's picture

More leverage makes everything better.

Wed, 01/19/2011 - 17:46 | Link to Comment taint
taint's picture

what the hell is left that can be leveraged?  

Wed, 01/19/2011 - 18:25 | Link to Comment Apostate
Apostate's picture

Bernanke credit food stamp cards. It'll be a big hit, with increasing food prices. Wal-Mart greeters will need to go to 100:1 leverage to buy carrots and Ho-hos. 

Wed, 01/19/2011 - 23:55 | Link to Comment Itsalie
Itsalie's picture


US needs another 12tr of govt debt? No problemo, Ben the chopper will buy all of those and more by QE5 or QE6. Cheer up, Ben is in the air, ready to drop toilet paper on america.

Thu, 01/20/2011 - 01:36 | Link to Comment Moonrajah
Moonrajah's picture

Ben is in the air, ready to drop used toilet paper on america.

There, fixed that for you!

Thu, 01/20/2011 - 01:34 | Link to Comment Moonrajah
Moonrajah's picture

Good thing they have printed the word 'Exhibit' on the slides, since evidence in court is marked the same way. Won't need to reprint when it comes to that.

Thu, 01/20/2011 - 03:57 | Link to Comment The Navigator
The Navigator's picture

The Bernank is going to need a bigger printing press - and then learn how to spell Quadrillion and Quintillion.

That's if we can Get to 2020 - my bet is we won't make it to 2014 with all these multiple ponzi schemes, unless we hire a real pro (Bernie Madoff) as our Treasury Secretary.

There's no getting away from the law of Exponential Numbers - you can only Ponzi for so long and then the Great White takes aways half your ass in 1 bite - and 2 seconds later he's back for the other half. The only shielding that is proven is PMs - Got PMs???

Thu, 01/20/2011 - 04:18 | Link to Comment The Navigator
The Navigator's picture

Has anyone calculated, or even termed, the number that the derivatives will be when total credit needed in 2020 is $200Trillion?

Is that when everyone learns how to spell Quintillions?

No worry, the game should be over long before that.

Thu, 01/20/2011 - 05:32 | Link to Comment Bear
Bear's picture

I am glad to see we still have robust exports ... lunacy

New research shows human needs in descending order are:

Air

Water

Food

Credit

Sex

I see that Credit has moved up recently.

Thu, 01/20/2011 - 06:42 | Link to Comment no2foreclosures
no2foreclosures's picture

The QUESTION that everyone is NOT asking, including ZH, is WHO the HELL is all the money OWED TO???

Thu, 01/20/2011 - 07:57 | Link to Comment Moonrajah
Moonrajah's picture

Skynet.

Wed, 01/26/2011 - 00:37 | Link to Comment Hephasteus
Hephasteus's picture

The god of compounding nonsense.

Fri, 01/21/2011 - 01:19 | Link to Comment M.B. Drapier
Tue, 01/25/2011 - 13:54 | Link to Comment andyupnorth
andyupnorth's picture

Perhaps the system will only crash once we exceed the limits of the double precision floating-point format...

http://en.wikipedia.org/wiki/Double_precision_floating-point_format

10^308 Here we come!

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