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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 | Link to Comment jeff314
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fuck all of them

Mon, 12/10/2012 - 18:58 | Link to Comment 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 | Link to Comment akak
akak's picture

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

Mon, 12/10/2012 - 19:09 | Link to Comment 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 | Link to Comment 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 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

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 | Link to Comment ShrNfr
ShrNfr's picture

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 | Link to Comment cossack55
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Janes? Please!

Mon, 12/10/2012 - 21:39 | Link to Comment AldousHuxley
AldousHuxley's picture

instead of PIGS we have iSUG

Mon, 12/10/2012 - 22:20 | Link to Comment Jam Akin
Jam Akin's picture

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 | Link to Comment 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 | Link to Comment Jam Akin
Jam Akin's picture

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

Mon, 12/10/2012 - 22:03 | Link to Comment AldousHuxley
AldousHuxley's picture

Hillary clinton

Mon, 12/10/2012 - 22:28 | Link to Comment Jam Akin
Jam Akin's picture

Ouch, that hurts!  Wait a minute I heard she doesn't deal with dudes.

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

Mon, 12/10/2012 - 20:04 | Link to Comment akak
akak's picture

No, that special exam is reserved for Dr. Bernanke.

Tue, 12/11/2012 - 03:20 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment akak
akak's picture

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 | Link to Comment tooriskytoinvest
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BIG STOCK SELL-OFF IN YEAR END FINALE? The Economy Is Rapidly Getting Worse As We Head Into 2013

http://investmentwatchblog.com/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 | Link to Comment SheepDog-One
SheepDog-One's picture

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 | Link to Comment 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 | Link to Comment hawk nation
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The beatings and loss of liberty will continue until moral improves

Mon, 12/10/2012 - 19:16 | Link to Comment akak
akak's picture

It's spelled "morel".

Mon, 12/10/2012 - 20:58 | Link to Comment ImReady
ImReady's picture

or morale

 

Tue, 12/11/2012 - 08:17 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

Keep commenting. I'm geting smarter.

Mon, 12/10/2012 - 19:11 | Link to Comment Jendrzejczyk
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We will soon be "WINNING"!!!

Yeah us!

Mon, 12/10/2012 - 19:12 | Link to Comment Ghordius
Ghordius's picture

"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 | Link to Comment 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 | Link to Comment Ghordius
Ghordius's picture

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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment SpykerSpeed
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Denial is the coming river of tears in the US.

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

Mon, 12/10/2012 - 19:17 | Link to Comment evolutionx
evolutionx's picture

hi folks

 

Good news: facebook is down!

 

Hacked


http://www.mmnews.de/index.php/etc/11508-facebook-down

Mon, 12/10/2012 - 19:38 | Link to Comment yogibear
yogibear's picture

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 | Link to Comment orangegeek
orangegeek's picture

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.

 

http://bullandbearmash.com/chart/sp500-weekly-finishes-marginally/

 

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 | Link to Comment Acet
Acet's picture

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

Mon, 12/10/2012 - 19:21 | Link to Comment Shizzmoney
Shizzmoney's picture

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.

https://www.youtube.com/watch?v=IhnUgAaea4M

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

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

Mon, 12/10/2012 - 19:22 | Link to Comment booboo
booboo's picture

so America only gets the bronze medal?

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

Mon, 12/10/2012 - 19:33 | Link to Comment TruthInSunshine
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China is not expected, whether by its own citizens, or the rest of the world, to report transparent numbers, so it's all good.

They just need to keep making the least expensive consumer goods, even if demand is way down.

Mon, 12/10/2012 - 20:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Yes, and now that the consumer is dead, I expect things to get interesting damnit, otherwise I really don't know what to do with all this popcorn.

Mon, 12/10/2012 - 19:33 | Link to Comment hooligan2009
hooligan2009's picture

Unfortunately, this sad graphic only tells half the story relating to the rape and pillage of multiple generations by the (slightly smarter) banks, health companies and warmongers "gaming" the (much dumber) politicians.

It is my position that Federal/Government debt belongs to individuals making up the political spectrum up of the country (can't call the USA a republic any more, it is a mobocracy, same with countries like France and Italy). 

The graphic excludes the other part of the political spectrum, namely the enabling mechanism called central banking that is attempting to bridge the gap between the excess of the last twenty years, from Clinton (who facilitated the transfer of the entire western manufacturing base to thrid world countries) to Bush and now Obama. Since bank notes, electronic or otherwise, are a promise to pay the bearer on demand the face value of the note, bank notes are debt. Since the central banks are agents of their governments, central bank printing is Government (personal) debt. 

It's not just a US problem. The Swiss are amongst the most corrupt nations on earth and are a clear currency manipulator. What else would you call a fixed exchange rate of SFr1.20/1 Euro and the run of huge balances of Euros? The Swiss franc would have to be allowed to find its own level against the Euro (and hence the US dollar, sterling and yen) in order for it not to be a manipulator of its own currency.

Same applies to currency swaps. These are not victimless debt. Someone has to unwind the P/L. I think the graphic needs restating to include central bank balance sheet accumulation and currency swaps between central banks.

Finally, don't forget to get ready for middle class loss of benefits/tax increases of between $8,000 and $14,000 per annum to pay for banks losses, health companies profits, destroying someone elses infrastructure and causing explosions, for at least ten years, starting from now OR fifteen years starting after Obama is out, OR twenty years if the can is kicked ten years further out by soemthing as tepid as Simson Bowles.

Mon, 12/10/2012 - 19:44 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

The system works fine since investors of  the unpayable debt are rewarded with debt backed irredeemable intrinsically currency which is backed by the full faith and confidence of the U.S. and Europe Gong Show. It's not like we're lending the Gong Show contestants gold to flush down the toilet. That would be scary. When it all comes crashing down who cares? House of Cards are supposed to topple anyway. 

Mon, 12/10/2012 - 19:58 | Link to Comment XOFnews
XOFnews's picture

Commute times are down.

Mon, 12/10/2012 - 20:11 | Link to Comment game theory
game theory's picture

The US is ok...we are going to continue to devalue the dollar. But our largest trading "partners" are in for some real heartache. 

Mon, 12/10/2012 - 20:35 | Link to Comment williambanzai7
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You will notice that Japan is the only Asian country on that list.

Mon, 12/10/2012 - 21:26 | Link to Comment cesarsp_us
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and i thought we was number 1

Mon, 12/10/2012 - 23:16 | Link to Comment Paracelsus
Paracelsus's picture

I know I will get a swift kick in the goolies for this ..... but isn't it standard to raise import tariffs during a severe economic downturn,to protect ones' own industry and agriculture,to redress the imbalance in currencies and restore competitiveness. Oh wait,shit,what was I thinking....NAFTA,GATT,WTO. Import tariffs would strangle trade and interfere with the free market.  With the coming depression I have some serious investment advice:  cigarettes,shoes,books and coffins (and pot belly stoves). And I think Dentists will do well.See ya on the soup line. Oh,and FUCK BERNANKE and all those wall street toe rags.

Tue, 12/11/2012 - 08:04 | Link to Comment GreatUncle
GreatUncle's picture

I have a challenge for Zero Hedge on this.

Put up all the countries in the world now that are not running a defecit. I have never seen that chart and does it exist?

Reason being like all nations globally through efficiency (more productive ways of doing things). Then would the magnitude of the funding defecit summed up around the world = 0.

Or is the global defecit increasing and at what rate?

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