Americans in their 50s, 60s and 70s - the Baby Boom generation - are carrying unprecedented amounts of debt, a shift which according to the WSJ "reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations." While aggregate debt of Gen-Xers has admirably declined by 12% in the past 12 years, the aggregate debt of the average Baby Boomer has soared by an unprecedented 169%!
"There is excessive debt everywhere and negative interest rates are dangerous... My number one fear? That’s the same as asking me where it will start. When you view the economy as a complex, adaptive system, like many other systems, one of the clear findings from the literature is that the trigger doesn’t matter; it’s the system that’s unstable. And I think our system is unstable... Central Bank models are just wrong"
All signs are that things are in fact in danger of getting out of hand...
Lies are always misrepresentations of reality, and reality always wins. The US government rests on an inherently unstable foundation of whoppers - big lies so huge they would make big lie proponent Adolf Hitler blush. The first trick to defeating an enemy is to ascertain its biggest weaknesses and the lies, which it feeds itself, flowing from those weaknesses.
And you thought Greece was "fixed"...
The political class has completely disrupted the American structure of production, made American workers uncompetitive, snuffed the life out of entrepreneurs, and burdened the entire nation with a debt obligation the size of Jupiter. The US economy is not the strongest and most durable in the world — it is an unskilled thirty-two-year-old waiter crashing at his parent’s place and trying to pay down an $80,000 international relations degree.
How the Chinese central bank derailed the yuan and help Donald Trump rose to power.
Puerto Rico has devised a scheme the island says will help put it back on the path to debt sustainability. You can read on to learn the specifics, but in essence, the commonwealth wants creditors to take a massive haircut which may or may not be ameliorated down the road.
Something dire has happened to the intelligence and awareness of Western peoples who seem no longer capable of comprehending the machinations of “their” governments. Accountable government in the West is history. Nothing but failure and collapse awaits Western civilization.
Two weeks ago we, in collaboration with several readers, requested an official response from the Fed through a Freedom Of Information Act submission. Surely if the Fed would go so far as to call us liars, it would have no problem either responding or providing the required information. This is what we got back.
Clearly, something’s gone horribly awry. Hard work, perseverance, and ingenuity likely have something to do with the shiny streets. Conversely, sloth, drug abuse, and mental defectives likely have something to do with the blighted streets. But we also have an inkling that 20 years of activist Fed policy has left its marks all over both.
"You can’t deny the price action. Over the last few weeks, it is positively buoyant. If I were short, my butt cheeks would be tightening up. I’m starting to develop a theory, which is crazy, but then again... it might not be entirely crazy. You can help me decide. Maybe gold is starting to price in some of this political instability. Maybe it is starting to price in a Sanders or Trump presidency."
Last week, we noted that Italy is rushing to defuse a €200 billion time bomb in the country’s banking sector as investors fret over banks’ exposure to souring loans. On Wednesday we learn that Italy has indeed managed to strike a deal with Brussels to help alleviate banks’ NPL burden but the agreement falls well short of the type of comprehensive "solution" the market was hoping to see.