Presenting The Fund-tastic Four: Ireland, Greece, Spain And... The U.S.

Tyler Durden's picture


Behold the fund-tastic four: Ireland, Greece, Spain and... the US? These are the four countries that in the past four years have accumulated the greatest deficit as a % of GDP (and yes, at just under 50%, the US is worse than Spain whose cumulative deficit has been over 40% of GDP), which in turn they have had to fund with what else: new debt.

The chart explains the scramble to force rates across the world to all time lows: a necessity to allow continued deficit funding, even if by doing so, the monetary authorities have made any economic growth impossible as true inflation (coupled with a rise in funding costs and government yields) is the last thing governments, locked in years more of deficit funding, can afford.

And while Europe is more or less toast due to a fixed currency, which means the only way it can grow its way out of the current mess which in turn would mean an internal devaluation resulting in 30-50% wage declines (as explained before), the US "can print its own currency" so as to preserve the myth that nominal wages are flat or rising. Of course, the concurrent external devaluation means the US will have to devalue the dollar (i.e., loss of purchasing power by those paid in USD). Relative to whom? Why Europe of course, which means the EUR will have to rise even more relative to the USD as the US "rebalances" its way out of its own deficit spending quicksand.

Alas, this takes us back to square one, as any external devaluation by the US would mean the internal devaluation in Europe will have to be even more profound, read even greater wage reductions, even greater social instability, and even greater cuts in the welfare spending. It also will mean even more and bigger bailouts in Europe, and a barage of endless lies and propaganda out of the unbearable Brussels-bsed circle of unelected Eurocrats.

Ah, the joy of closed loop Keynesian systems, in which one's gain is always someone else's loss...

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Mon, 12/10/2012 - 18:55 | 3050040 jeff314
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fuck all of them

Mon, 12/10/2012 - 18:58 | 3050045 Dan The Man
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it'll be the only sex i've been getting lately...not counting my colonoscopy

Mon, 12/10/2012 - 19:00 | 3050050 akak
akak's picture

My doctor keeps asking me why I insist on weekly prostate examinations.

Mon, 12/10/2012 - 19:09 | 3050063 TruthInSunshine
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From Sen. Obama’s Floor Speech, March 20, 2006:


"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

*At the time, Senator Obama was urging Congress not to tolerate an increase that would bring the debt ceiling to $9 trillion. FORWARD!

Mon, 12/10/2012 - 19:37 | 3050149 akak
akak's picture

That was more than just a finger --- that was the whole fist.  And without lube.

Mon, 12/10/2012 - 19:46 | 3050165 Mr Lennon Hendrix
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The debt rhetoric is the same as the war rhetoric.

Where is the Dem WH getting its intel concerning chem weapons in Syria?  John Bolton.

The same Bolton who flubbed the chem weapen debacle concerning Iraq.

Yet Democrats all over America have joined the GOP in bombing Nation-States to pieces in the name of peace.  This while Europe, the same Europe that decried Bush' wars, bombed Libya to smithereens and gets a Nobel Peace Prize for it.

1984 in full force.

Mon, 12/10/2012 - 20:18 | 3050296 ShrNfr
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Syria flubbed loading a Scud back in 2007 with vx/sarin. It took out a bunch of their guys and some Iranians that were part of the effort. Do a search on: "vx scud syria accident janes". Janes is the military mag. as you might remember. Including it keeps the clutter down. They do have them. They are also not signatories to the chemical warfare convention.

Mon, 12/10/2012 - 20:49 | 3050388 cossack55
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Janes? Please!

Mon, 12/10/2012 - 21:39 | 3050513 AldousHuxley
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instead of PIGS we have iSUG

Mon, 12/10/2012 - 22:20 | 3050614 Jam Akin
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Those Iraqi chemical weapons were evacuated to Syria just ahead of the US invasion according to yet another of those hard to keep track of theories, uh, yeah, right, that's the ticket...

Mon, 12/10/2012 - 19:33 | 3050136 Peter Pan
Peter Pan's picture

Get him to insert two fingers next time so you can get a second opinion.

Mon, 12/10/2012 - 19:51 | 3050210 Jam Akin
Jam Akin's picture

You must be in good hands.  What is her name?

Mon, 12/10/2012 - 22:03 | 3050573 AldousHuxley
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Hillary clinton

Mon, 12/10/2012 - 22:28 | 3050615 Jam Akin
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Ouch, that hurts!  Wait a minute I heard she doesn't deal with dudes.

Mon, 12/10/2012 - 19:58 | 3050241 Ookspay
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Lol... Does he check it with one hand on each of your shoulders?

Mon, 12/10/2012 - 20:04 | 3050265 akak
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No, that special exam is reserved for Dr. Bernanke.

Tue, 12/11/2012 - 03:20 | 3051262 Joe A
Joe A's picture

Come to Europe, you'll get fucked in the ass on a weekly basis by our puppetmasters in Brussels.

Mon, 12/10/2012 - 19:06 | 3050060 Tsunami Wave
Tsunami Wave's picture

Shhhh stop talking about this.....debt is good and Paul Krugman told you so. "Austerity" is bad, remember that.  We should be blowing through our infinitely increasing credit line.

Mon, 12/10/2012 - 19:20 | 3050087 yogibear
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Paul Krugman is a closet socialist. All to max out debt and misery and then turn around and get everyone to agree to a new world order currency.

Mon, 12/10/2012 - 19:23 | 3050103 akak
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If Paul Krugman is in the closet regarding his socialism, then the closet walls must be made out of glass.

Mon, 12/10/2012 - 19:07 | 3050065 tooriskytoinvest
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BIG STOCK SELL-OFF IN YEAR END FINALE? The Economy Is Rapidly Getting Worse As We Head Into 2013

Mon, 12/10/2012 - 19:28 | 3050123 SheepDog-One
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Right when they've got everone convinced stocks simply can't go down, calm as Hindu cows, 'All is Well' is when they'll pull the rug out.

Mon, 12/10/2012 - 19:37 | 3050154 Mr Lennon Hendrix
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When the rug gets pulled out the stock market will be the least of everyone's worries.

Mon, 12/10/2012 - 19:08 | 3050066 hawk nation
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The beatings and loss of liberty will continue until moral improves

Mon, 12/10/2012 - 19:16 | 3050082 akak
akak's picture

It's spelled "morel".

Mon, 12/10/2012 - 20:58 | 3050417 ImReady
ImReady's picture

or morale


Tue, 12/11/2012 - 08:17 | 3051440 Mitzibitzi
Mitzibitzi's picture

A Morel is a mushroom. Though you grow mushrooms by keeping them in the dark and feeding them on shit, so you may have a point.

Mon, 12/10/2012 - 19:10 | 3050067 Peter Pan
Peter Pan's picture

You have given us the figures in percentage terms, now how about giving it to us in nominal terms for all the  nations on the chart so we can gauge the true plight of a world plagued by governments gone mad.

The system is due for a violent reset unless that little bump that Switzerland has is worth trillions.

Mon, 12/10/2012 - 19:11 | 3050072 Peter Pan
Peter Pan's picture

Actually the most telling thing about that chart is the fact that Iceland is not on it.

Mon, 12/10/2012 - 19:15 | 3050078 Its_the_economy...
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Keep commenting. I'm geting smarter.

Mon, 12/10/2012 - 19:11 | 3050073 Jendrzejczyk
Jendrzejczyk's picture

We will soon be "WINNING"!!!

Yeah us!

Mon, 12/10/2012 - 19:12 | 3050076 Ghordius
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"And while Europe is more or less toast due to a fixed currency, which means the only way it can grow its way out of the current mess which in turn would mean an internal devaluation resulting in 30-50% wage declines"

Is this a kind of dogma? Wage declines can happen by stagnation alone, if you wait a couple of years. And the whole "due to a fixed currency" wishful-for-a-crash whistling is a couple of years old, now.

Meanwhile the numbers above tell a different story of different ACCELLERATIONS.

Sometimes standing still is the smarter options, you know?

Mon, 12/10/2012 - 19:36 | 3050146 Peter Pan
Peter Pan's picture

This idea of internally devaluing wages in Europe is about as clever as buying real estate in Fukushima. By devaluing wages not only will it lead to outright poverty but it will also gut real estate values which in turn will destroy banks which in turn will require even more funding from outside sources on the public purse.........or is that the plan?

Tue, 12/11/2012 - 03:46 | 3051278 Ghordius
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your words just show your bias versus countries were majorities are highly leveraged home owners, something that is not the norm in many continental countries

just as an example: over 60% of Germans live in rented apartments

Tue, 12/11/2012 - 08:21 | 3051445 Mitzibitzi
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Yeah, but that means nearly 40% are highly leveraged home owners. 40% of the population having their pockets emptied still creates a lot of problems.

Mon, 12/10/2012 - 19:54 | 3050193 HoaX
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Also, calling Austerity Keynesian is a bit of a contradictio in terminis. European annual deficits on average have fallen since the start of the crisis. The US annual deficit?

Tyler already lost me with his unelected Eurocrats ramble though. I expect such nonsense from the Sun or Daily Mail.

Mon, 12/10/2012 - 21:23 | 3050484 BullionBoy
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so you're pro unelected Eurocrats?  That's ok with you?


If so I'd say you're a complete moron.  How is that ok?


Enlighten us.

Tue, 12/11/2012 - 03:41 | 3051274 Ghordius
Ghordius's picture

it's about ignorance and it's exploitation by propaganda

unelected has a meaning, appointed and confirmed too

our EU commission is appointed by the national governments and confirmed by the elected EU parliament

in the same way as a StateSec or a DefenseSec in the US, by the way

enough enlightment? would you not find it strange if we would constantly talk about the "unelected US Defense Secretary" as if this would have a deeper meaning?

Mon, 12/10/2012 - 19:15 | 3050079 centerline
centerline's picture

lol - every argument I have had with someone of the neoclassical economic persuation always ends with them digging in using an open system analogy/example.

Mon, 12/10/2012 - 19:16 | 3050081 SpykerSpeed
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Denial is the coming river of tears in the US.

Mon, 12/10/2012 - 19:18 | 3050090 TruthInSunshine
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In KronyKapturedKomradeKapitalist America, da Nile flows through you!

Mon, 12/10/2012 - 19:17 | 3050089 evolutionx
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hi folks


Good news: facebook is down!



Mon, 12/10/2012 - 19:38 | 3050153 yogibear
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This is good news!!! Many happy hackings!

If they could only hack the Federal Reserve and play around with Bubble Bernake's printing and bond purchases. 

Mon, 12/10/2012 - 19:19 | 3050098 orangegeek
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When this all rationalizes - and we are not far off - days as opposed to weeks, we can expect a downturn that should end below March 2009 lows.


This planet is going to suck for the next few years.  And we should expect a lot of unrest globally - there will be no expections in locale.

Mon, 12/10/2012 - 19:21 | 3050099 Acet
Acet's picture

I for one welcome our new "Major-seven" overlords

Mon, 12/10/2012 - 19:21 | 3050101 Shizzmoney
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The only difference between the US and everyone else is that we can bomb the shit out of anyone in the world, and they can't.

Mon, 12/10/2012 - 19:22 | 3050102 buzzsaw99
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the other three don't have the bernank

Mon, 12/10/2012 - 19:36 | 3050145 Mr Lennon Hendrix
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No, but they have the Nobel Peace Prize.

Mon, 12/10/2012 - 19:22 | 3050105 booboo
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so America only gets the bronze medal?

Mon, 12/10/2012 - 19:27 | 3050120 LawsofPhysics
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Where's China? Something is amiss bitchez.

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