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Chart Of The "New Normal": Ben Bernanke Doubles Down - Literally

Tyler Durden's picture


The chart below is self-explanatory, and somewhat jaw-dropping...

Source: debt to the penny


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Sun, 12/16/2012 - 12:00 | 3068551 vast-dom
vast-dom's picture

Abe will one up this before it all goes crashing out.

Sun, 12/16/2012 - 12:03 | 3068561 sunaJ
sunaJ's picture

The first hill of the world's biggest roller coaster.  Keep hands and feet in the car at all times and thanks for visiting Earth.

Sun, 12/16/2012 - 12:28 | 3068629 SWRichmond
SWRichmond's picture

Forgive my snarkiness, but the chart is not jaw-dropping at all. It merely shows how successful Bernanke has been at doing his job: turning the American people into debt slaves to the banks, and tax slaves to the government.

Sun, 12/16/2012 - 12:38 | 3068659 Freewheelin Franklin
Freewheelin Franklin's picture

Hanlon's Razor.

“Never attribute to malice that which can be adequately explained by stupidity.”

Sun, 12/16/2012 - 12:56 | 3068692 Mr. Magniloquent
Mr. Magniloquent's picture

At one time, I too credited the follies of Bernanke and Krugman to being institutionally dim-witted academics unable to see beyond their sychophantic echo-chamber, but alas, no more. I believe them to be fully aware of their status as high-priests to the oligarchy, and that their role is to perpetuate said establishment. History, both past and present, has contradicted them too numerously for men with such great access to information to be blind of their own actions.

Sun, 12/16/2012 - 12:59 | 3068698 The Juggernaut
The Juggernaut's picture

I love how Bastid Bernanke threw the responsibility back onto the politicians with his sensational term, "Fiscal Cliff."  Great Psy-fake-out.  What about the CURRENCY CLIFF you piece of trash?

Sun, 12/16/2012 - 13:13 | 3068732 markmotive
markmotive's picture

All the prerequisites for a hyperinflationary collapse now taunt America

Sun, 12/16/2012 - 13:39 | 3068779 Landotfree
Landotfree's picture

So the money supply is increasing at great speed and decreasing at great speed at the same time?

There is nothing the Fed can do, this has been known before you were born.   The collapse will happen as the demand/supply was no longer able to expand exponentially to pay for the prior i.e. interest.  

The equation has been in place since the last collapse to once again collapse, usually a 60-80 year cycle or a generation.   

"now taunt America"

Has nothing to do with America, more like the world as anyone that uses or is connected to the using the equation will feel the blunt force of the end result of the equation.

1-2 billion unfunded liabilities will have to be liquidated is my guess.

Sun, 12/16/2012 - 13:41 | 3068802 Randall Cabot
Randall Cabot's picture

It's only $.164 Quadrillion

Sun, 12/16/2012 - 13:45 | 3068809 Landotfree
Landotfree's picture

I think it would be .0164Q, they are really just numbers where the decimal point can be moved.   After 60-80 years or a generation... whatever number base you are using is really irrelevant, the system will not be able to exponentially grow.

Sun, 12/16/2012 - 14:25 | 3068871 Enslavethechild...
EnslavethechildrenforBen's picture

Weimar Republic here we come. Poverty is wealth. Slavery is freedom. Oppression is liberty.

Sun, 12/16/2012 - 14:47 | 3068920 AgShaman
AgShaman's picture

How Orwellian of you

Here's another chart.

Sun, 12/16/2012 - 16:12 | 3069086 Landotfree
Landotfree's picture

This is the end result every time... the Weimar Republic is just the symptom of the problem.  

You start a system where you attach interest to your medium of exchange it's going to be the same result.   There is nothing the government or the Fed can do, all paths lead to the same place.   

Sun, 12/16/2012 - 20:18 | 3069608 JR
JR's picture

$16,366 billion! The rest of us, we don't know so much about zeros. But Bernanke, when you talk about zeros, he knows about zeros. And when he comes around, your stuff becomes zero.

Sun, 12/16/2012 - 15:45 | 3069023 Hulk
Hulk's picture

Mako's back !!!

Sun, 12/16/2012 - 21:16 | 3069774 Hedgetard55
Hedgetard55's picture

+55 Mako has been right from the start. Is Mako Karl Denninger?

Sun, 12/16/2012 - 15:32 | 3069003 DanDaley
DanDaley's picture

All the prerequisites for a hyperinflationary collapse now taunt America


Bernank will taunt us,

and now we are taut,

because we haven't been taught,

but he's now going to teach us, but good...

Sun, 12/16/2012 - 13:57 | 3068832 rbg81
rbg81's picture

Can't wait for Bernake to leave, go back to Princeton, and start making the big $$ on the lecture circuit bemoaning his successor's "irresponsibility". Oh, the humanity.....

Sun, 12/16/2012 - 16:41 | 3069151 Spaceman Spiff
Spaceman Spiff's picture

Incredibly well said, Mr. Magniloquent.





Sun, 12/16/2012 - 20:58 | 3069728 Slightly Insane
Slightly Insane's picture

The qualifications for either of their positions is very, very unique.  Just think about it.  You would have to be devoid of a concious, and be able to tell everyone a complete lie with a straight face, and perform acts which would surely commit one to hell if there is such a place.  For what? 

Sun, 12/16/2012 - 21:54 | 3069867 Freewheelin Franklin
Freewheelin Franklin's picture

I suppose the malice is in the fact that keep trying to cover up their stupidity.

Sun, 12/16/2012 - 13:01 | 3068706 Umh
Umh's picture

I can't believe that we strung so many generations of stupid bankers together. They knew what they were doing if not by plan then by results.

Sun, 12/16/2012 - 13:40 | 3068801 Landotfree
Landotfree's picture

Funny all I see is 7 billion bankers.  

Sun, 12/16/2012 - 15:48 | 3069032 jerry_theking_lawler
jerry_theking_lawler's picture

I thought about going into banking (as I have an engineering degree and MBA).....but, at about the time I was seriously considering it, I had an awakening and decided since I had a soul that I could not possibly do it. Was not going to compromise myself just for $.

Fuck the bankers and what they represent.

Sun, 12/16/2012 - 18:12 | 3069342 Thamesford
Thamesford's picture




I see debt people


Sun, 12/16/2012 - 21:27 | 3069799 Tango in the Blight
Tango in the Blight's picture


Sun, 12/16/2012 - 13:20 | 3068738 rwe2late
rwe2late's picture

 Sounds more like Pollyanna's excuse.

Are you saying US Gov't/Fed policies are adequately explained by stupidity?

Too bad the leaders are not a bit smarter (like, then they would no longer promote handouts to the TBTFs and their political cronies, no longer arrogantly support dictatorships and apartheid regimes, and no longer seek the power and enrichment that comes from global militarism and war profiteering.

Sun, 12/16/2012 - 13:35 | 3068782 Woodyg
Woodyg's picture

I'd maybe believe that if the banksters that caused the crash didnt also profit so generously from it while everyone else not connected to the money cartel pays the bills with decreased wages, access to jobs, and inflation.

The Fed is the Soproanos mafia family and We the People are the Sporting Goods store owner -

Sun, 12/16/2012 - 16:56 | 3069194 Gimleteye
Gimleteye's picture

Heninlein, I think

Sun, 12/16/2012 - 22:03 | 3069887 Freewheelin Franklin
Freewheelin Franklin's picture

I believe Hanlon said it first and Heinlen slightly altered it.

"You have attributed conditions to villainy that simply result from stupidity"

And then there's:

"Never ascribe to malice that which is adequately explained by incompetence"

- Napoleon

"...misunderstandings and neglect create more confusion in this world than trickery and malice. At any rate, the last two are certainly much less frequent."

- Goethe

"Many journalists have fallen for the conspiracy theory of government. I do assure you that they would produce more accurate work if they adhered to the cock-up theory."

—Sir Bernard Ingham

Sun, 12/16/2012 - 17:31 | 3069260 Treason Season
Treason Season's picture

Hey Frewheelin'freak, if you aren't some Fed suck-up troll and actually believe Berskankee is just stoopid ask yourself this simple question,. "How could the head of the private monoply controling the issuance of the nation's currency not know the function gold plays in the financial system?" 

Sun, 12/16/2012 - 21:56 | 3069874 Freewheelin Franklin
Freewheelin Franklin's picture

One word: Arrogance.

Sun, 12/16/2012 - 12:52 | 3068687 disabledvet
disabledvet's picture

we are definitely tax slaves...but NOT debt slaves. at least not YET. to discharge a debt "all" i need to do is earn dollars. where the problem comes about is where the government uses "electro dollars" to discharge "balance of payment issues." (the trade deficit has SOARED under Obama: a currency is a MEANS OF EXCHANGE first and foremost. Once the "faith" is lost then all those dollars must find a home somewhere...what is called the "dollar overhang" (the fact that there are trillions of worthless greenbacks in circulation worldwide) "comes home with a vengeance." instead of being used to prop of a worthless debt regime those dollars are used to generate an inflation...causing foreign capital to flee and interest rates to start rising. i think Chairman Bernanke has STRONGLY hinted at that...not that he would ever raise interest rates of course... but that the..ahem.."market will." of course "this is a seemless process by which the entire US edifice called "an economy" collapses." it's really no big deal. how 'bout a slurpie to help keep your mind off these things!

Sun, 12/16/2012 - 13:13 | 3068735 AmCockerSpaniel
AmCockerSpaniel's picture

To pass judgment on Bernake I need a chart of longer duration.

Sun, 12/16/2012 - 14:27 | 3068885 vast-dom
vast-dom's picture

Are you a true Patriot¿¿¿¿¿¿¿¿



Sun, 12/16/2012 - 20:43 | 3069683 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

That was half-vast!

Sun, 12/16/2012 - 15:38 | 3069013 Cash2Riches
Cash2Riches's picture

Don't worry, soon enough it will be the Triple down.

Sun, 12/16/2012 - 20:49 | 3069700 Slightly Insane
Slightly Insane's picture

.... and place your seat in an upright condition with your meal tray stowed.  Vomit bags are located in your forward magazine pocket.  Please keep your seatbelt fastened. 

Sun, 12/16/2012 - 12:40 | 3068634 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, vast-dom, the first BIG dominos of this new collapse look to come from poor, benighted Japan.  Maybe we should just let them build nukes, balance of power and all...

But, as you imply, we have a big scary time ahead as huge "wealth" gets lost in the Great Deleveraging.

Sun, 12/16/2012 - 12:44 | 3068672 CPL
CPL's picture

Funny thing is all that wealth is back with nothing but IOU's based from other IOU's.


If the wealth is lost, nothing is really lost.

Sun, 12/16/2012 - 13:39 | 3068796 Woodyg
Woodyg's picture

The middle class and poor lost real wealth - that comes from LABOR.
The rest of the economy is simply wealth extraction by the Rentiers. Malinvestment.

Free markets used to be about the freedom from wealth extraction by the Rentiers - now the Free Market is the freedom FOR the Rentiers to steal everything not tied down - and to burn anything that Is tied down.

Sun, 12/16/2012 - 12:35 | 3068652 Chupacabra-322
Chupacabra-322's picture

LIBOR CONNECTION………. Robert Holmes, father of James Holmes Batman Movie shooter, was going to testify in LIBOR Scandal.

Peter Lanza, father of Adam Lanza Sandy Hook shooter, was going to testify in LIBOR Scandal.

CNBC Ex had his small children murdered recently over 43 trillion banking scandal.


Sun, 12/16/2012 - 12:50 | 3068683 Nage42
Nage42's picture

Stop eatting paint... really, it's crunchy and all, but it's putting da'big hert on yur da' brain.


Sun, 12/16/2012 - 13:23 | 3068758 Umh
Umh's picture

You are jumping to conclusions it could be caused by drugs, environment, being correct or even luck.

Sun, 12/16/2012 - 16:48 | 3069174 max2205
max2205's picture

But John Holmes fucked anything and everybody

Sun, 12/16/2012 - 13:09 | 3068723 stormsailor
stormsailor's picture

that is a chilling coincidence. 


some of my first coherent memories were jfk assassination,  i no longer believe anything from media or government.

Sun, 12/16/2012 - 13:16 | 3068744 fonzannoon
fonzannoon's picture

they could have just poisoned his burrito. i don't know that they had to put something like this in motion. "GE Exec eats poisoned burrito, world cheers". everyone would have forgot about him the next day.

Sun, 12/16/2012 - 15:53 | 3069041 jerry_theking_lawler
jerry_theking_lawler's picture

nope, killing him would lead to questions. threatening/killing family will ENSURE that he is compliant with their wishes....remeber he still has another son that is alive.

Sun, 12/16/2012 - 14:41 | 3068910 Chupacabra-322
Chupacabra-322's picture

The whole Global Crime Syndicate Economic system is tied into intelligence, espionage, bribery, racketering, terrorism, False Flags and murder.  Run by the CIA, MI6, Mossad out of the City of London of which Wall Street is just an extension of.

Sun, 12/16/2012 - 19:25 | 3069478 francis_sawyer
francis_sawyer's picture

The new Jerusalem... Shalom...

Sun, 12/16/2012 - 15:32 | 3069005 55 men
55 men's picture

Since we are talking strange coincedences ......

AVM made the following startling observation which can be confirmed on wikipedia:

Suzanne Collins is the author of ‘The Hunger Games’.

Suzanne Collins resides in Sandy Hook, Connecticut, with her husband and their two children.

This horrific crime was perpetrated at [Sandy Hook Elementary in Newton, next to the town] in which the author of ‘The Hunger Games’ lives. These are never random events.

This appears to be a deliberately chosen place and symbolic false flag – a child sacrifice ritual that the Illuminati love so much.

Hunger games is all about sacrificing 24 children to discourage the people from rising up. The sacrifice is there punishment.

Sun, 12/16/2012 - 16:50 | 3069175 max2205
max2205's picture

Steven King is pissed

Sun, 12/16/2012 - 16:54 | 3069185 Banksters
Banksters's picture

I am the wizard of America- Bernank



Sun, 12/16/2012 - 18:50 | 3069422 lolmao500
lolmao500's picture

Is it me or QE4VA looks like Al-QAEDA??

Sun, 12/16/2012 - 20:08 | 3069582 ball-and-chain
ball-and-chain's picture

Bernanke's man-tits squirt milk to the wealthiest.

The rest of us are forced to choke on dung.

That's life.


Sun, 12/16/2012 - 20:38 | 3069672 MsCreant
MsCreant's picture

I don't want his man tit milk. It will drown the world.

Sun, 12/16/2012 - 20:42 | 3069680 vast-dom
vast-dom's picture

and so on opening Nikkei Stock Average soars 1.6% to 9,895.68

Sun, 12/16/2012 - 21:22 | 3069785 Hedgetard55
Hedgetard55's picture

It will run like scalded dog, bro. Glad I sold all my yen 2 months ago but kept my Jap stox.

Sun, 12/16/2012 - 12:00 | 3068555 Eireann go Brach
Eireann go Brach's picture


Sun, 12/16/2012 - 12:06 | 3068578 SafelyGraze
SafelyGraze's picture

THE TRUTH ABOUT THE DEFICIT: It's Not Very Big, And There's Only One Way To Close It - Joe Weisenthal

hang on .. running the text through google translate .. just a sec ..

Sun, 12/16/2012 - 12:20 | 3068611 DeadFred
DeadFred's picture

Did it for you. If our economy was growing at a healthy rate the deficit would be managable. Just have to find the magic "Healthy Economy" button. Now where did I last see it...?

Sun, 12/16/2012 - 12:34 | 3068647 cossack55
cossack55's picture

I think you loaned it to Iceland.

Sun, 12/16/2012 - 12:47 | 3068677 flacon
flacon's picture

Krugman's Nobel Prize winning thesis summarized in one sentence: "If deficits didn't matter then deficits wouldn't matter so all we have to do is stop worrying about it and we can have a healthy economy." Krugman's solution to having us not care about deficits: "Fake an alien invasion or start a war so that we will be happy to deficit-spend."

Sun, 12/16/2012 - 15:41 | 3069018 hooligan2009
hooligan2009's picture

krugman thinks that zero taxes and unlimited benefits are possible..indefinitely..and politicians only levy taxes and limit spending because they are stupid.

Sun, 12/16/2012 - 17:03 | 3069206 foofoojin
foofoojin's picture

and here i thought it did serve a purpose. those in power have no limits and those with out power have limits so they do not gain power.

ie "only the little people pay taxes" , "to big to fail is to big to jail", "capitalism in good times, socialism in bad."


Sun, 12/16/2012 - 14:07 | 3068844 A Nanny Moose
A Nanny Moose's picture

Thanks. It lost me at the "Kruggybear" citation.

Sun, 12/16/2012 - 12:44 | 3068673 yogibear
yogibear's picture

Unless our treasury gives out $150,000 checks to everyone through more debt issuance our growth is limited. Once that's done it has other consequences. The modified Fed Keynesian plan is to trigger massive inflation. It's coming.  

The government knows the REAL unemployment will remain high. The government's job now is to mask it.

Sun, 12/16/2012 - 12:57 | 3068695 disabledvet
disabledvet's picture

absolutely. "the problem with exports is that the USA products are still too cheap." crash the dollar, soar prices...see what happens. So far we've had a massive Arab revolt, the collapse of the euro zone, the Fukushima nuclear disaster and land prices that keep surging in the USA. at some point the "bond ghouls" will appear.

Sun, 12/16/2012 - 12:08 | 3068582 Spastica Rex
Spastica Rex's picture

Oh, if only it were only Obama.

Keep hope alive.

Sun, 12/16/2012 - 12:08 | 3068584 Beam Me Up Scotty
Beam Me Up Scotty's picture

Well, when playing black jack at the casino if you lose you can keep doubling your bet until you win. Casinos have maximum bets though so you can't do that. But since Ben can never run out of money he can lose lots of hands in the hopes of finally winning one and getting his money back.

Sun, 12/16/2012 - 12:13 | 3068593 johnQpublic
johnQpublic's picture

just keep doubling down until you own the casino


Sun, 12/16/2012 - 12:15 | 3068599 WatchingIgnorance
WatchingIgnorance's picture

I am long Charmin, rice and beans.

Sun, 12/16/2012 - 12:21 | 3068614 Winston Churchill
Winston Churchill's picture

Sooner you learn to live without the Charmin the better.

Rice and beans, not so much.

The poor mans bidet is a jar of water.Left hand only.

Sun, 12/16/2012 - 12:31 | 3068637 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for ultra-bleak scenario, let's hope is does not get that bad.

Sun, 12/16/2012 - 14:13 | 3068857 A Nanny Moose
A Nanny Moose's picture

What are lefty's to do?

Sun, 12/16/2012 - 17:29 | 3069256 zelator
zelator's picture

As long as the "no double dipping" rule is strictly obeyed.

Sun, 12/16/2012 - 12:27 | 3068630 Theosebes Goodfellow
Theosebes Goodfellow's picture

Good to hear you have both ends of the "market" covered, Watching. ;-)


Mon, 12/17/2012 - 11:45 | 3068655 SafelyGraze
SafelyGraze's picture

THE TRUTH ABOUT EMMALINA: She's not Very Ill, and There's Only One Way to Make Her Better Again

"Emmalina can't see or hear"

"She can't get out of bed with that broken hip"

"She's incontinent"

"Her mind is gone and she's no longer eating"

Those are the kinds of lines you hear from people as the next-of-kin debates about Death's Doorstep and so on.

But there's a couple of things you should know about Emmalina.

One is that talking about her "advanced age" (112 years) is basically nonsense.

As Buddy (her gardener) points out, her health issues are mostly about the current stomach virus that's been going around, combined with counter-cyclical emanations of the humours making the body ache, that naturally taper off as a person gets better.

He notes two key numbers. One is that if Emmalina were operating at about full potential (as her children remember her), she would be up at dawn baking biscuits, starting a load of laundry, vacuuming the carpet.

The other is that since she has been bed-ridden, her time spent on "idleness" (sleeping, groaning, asking for her morphine) has jumped by about 10 hours per day.

As such, it's probably safe to surmise, that just a return to her normal routine would generate about 16 more hours of productivity from Emmalina each day.

That still leaves her being a 112-year-old woman with arthritis and dizzy spells. But that's okay. 

If you consider her age over the duration of her entire life, she has been, on average, 56 years old. That's less than retirement age.

History is pretty clear about what to do when you're in Emmalina's condition: Get healthy, and get younger.

So bottom line are three key points:

Emmalina's not as old as you think, especially when you adjust for these abnormal times during the past few years when she has been more than 100 years old.

Only health and youth can improve her condition. 

Even with no change in her current condition, the projections about her expenses ($23,000 per month) swamping her income ($1100 per month) and her savings ($14,000) are dicey. 

Sun, 12/16/2012 - 12:01 | 3068558 SHEEPFUKKER

An "A" student of the greater depression is he. 

Sun, 12/16/2012 - 12:03 | 3068560 vast-dom
vast-dom's picture

"student" yet to learn real world.

Sun, 12/16/2012 - 12:35 | 3068653 cossack55
cossack55's picture

Isn't "students" in Afgan spelled "taliban"?

Sun, 12/16/2012 - 12:03 | 3068559 spinone
spinone's picture

We have a debt based currency.  if the private sector is deleveraging, and debtors are defaulting, the public sector has to pick up the slack.


The problem is the currency

Sun, 12/16/2012 - 12:09 | 3068585 Tyler Durden
Tyler Durden's picture

Or.... and here is a revolutionary thought... one can wait until a new deleveraging price equilibrium is established, one without the interference of the state which courtesy of central planning has made price discovery a mockery. In that alternative universe reality, no intervention by the public sector would be needed.

Of course, it would mean the wipe out of trillion in mispriced equity, equity belonging to the same entities that define public policy, and who will do everything to inflate the debt away, efficient markets and taxpayer savings be damned, before they allow their invaluable equity-based "net worth" be washed away.

Sun, 12/16/2012 - 12:12 | 3068592 Spastica Rex
Spastica Rex's picture

Do you(s) think that continued exponential economic growth is possible under any circumstances at this point? I hate to say it, but serious question.

Sun, 12/16/2012 - 12:40 | 3068663 cossack55
cossack55's picture

Of course. That is why everything in nature (and the un-natural, maybe even the supernatural) grows forever. It explains why trees are 8-9 miles tall, why elephants are the size of LNG carriers, why bumble bees look like 747s. Economies are just like that.

Sun, 12/16/2012 - 14:11 | 3068851 Bollixed
Bollixed's picture

Great visuals. Now I'm beginning to see the problem a little clearer...we haven't been teaching this stuff in Kindergarten Economics 101.

Sun, 12/16/2012 - 16:58 | 3069197 Poor Grogman
Poor Grogman's picture

The science fiction paradigm of whole planets covered with sky-scrapers assumes energy scources that are currently unknown to us.

Growth is obviously limited by the energy available to us, therefore it is reasonable to assume that major new breakthroughts in energy availability may enable us to keep growing. (the Romans did not know how to harness any of the Hydrocarbon fuels).

However if our civilization devolved into a statist/socialist model where everyone is on the government drip feed. Where will the innovation and drive come from for human progress.

The world used to look to the west for answers.


Mon, 12/17/2012 - 00:02 | 3070172 StychoKiller
StychoKiller's picture

Therefore:  "The surface of a planet is NOT the correct place for an expanding, technological civilization." -- R.A. Wilson

Sun, 12/16/2012 - 13:03 | 3068711 disabledvet
disabledvet's picture

the simplest approach is for an "internal attack" on the dollar hegemony. say for example "Texas secedes and declares itself independent Republic." dollars will be accepted...but along side other currencies...none of which currently trade in the USA. in other words "what's the value of Texas real estate in euros? in yen? in Chinese Yuan?" we will immediately know that. once all these currencies are allowed to to trade openly then you will see Uncle Salami get serious about "deficit reduction."

Sun, 12/16/2012 - 14:24 | 3068877 A Nanny Moose
A Nanny Moose's picture

^ This ^

Why all the busybodied do-gooding, and fancy calculus? Just allow currency competition. May the best form of money, win.

Sun, 12/16/2012 - 23:28 | 3070095 r3phl0x
r3phl0x's picture

Unlikely. A single dominant, centrally-controlled currency is an incredible power that the elite will not give up voluntarily.

Sun, 12/16/2012 - 18:52 | 3069423 AGuy
AGuy's picture

"we will immediately know that. once all these currencies are allowed to to trade openly then you will see Uncle Salami get serious about "deficit reduction."

At that point the Federal gov't will be irrelevant. States won't seek independance until the dollar is dying, and the Federal Gov't is too weak to prevent succession.

 At this point Deficit reduction is irrelevant. The gov't simply owes too much debt. If Bernanke raises raises modestly (say 4%) The interest payments on the existing debt will eat up the majority of tax revenue. The only thing keeping WDC operating are the deficits and the ZIRP. That said it may be awhile before things get dicey. Consider how long the EU has been able to play kick the can so far. All the non-northern EU members are insolvant and have even worse financial problems than the US.




Sun, 12/16/2012 - 13:19 | 3068751 centerline
centerline's picture

I think that is a great question.  May be "the question."  Through some reorganization/redefinition of currencies/debt/etc. - maybe they can morph this mess into some new ponzi scheme where everything is based on derivatives of the previous system.  Heck, if every major country winds up on thier knees facing mutually assured economic destruction, who knows?  But, such a transition would probably require some seriously wierd transformations regarding private/public, property rights, etc.

But, I always come back to the physical limitations.  So many promises that can't be kept.  Energy.  Social complexity.  Food/water supply/demand/distribution.  Etc.  I just don't see anything buying any significant length of time.  Rather, just containing the damage.

Just speculating here...  thinking out loud.


Mon, 12/17/2012 - 01:39 | 3070371 RockyRacoon
RockyRacoon's picture

Just stopping by Bloomberg at the late hour to see how things are going.  Apropos your comment, the Yen/Japan is just a seeming miracle.  How they keep afloat is the marvel of this century... so far.  It doesn't bode well for how long the U. S. can continue the charade.   Imagine how destitute and downtrodden our middle class (if there is one left at all) will be after the looting is done over such a long period.  Things go a bit differently here it seems.   There isn't even a hint of the rule of law any longer.  Theft is now blatant.  Hell, there isn't even the tiniest bit of a whisper of enforcing law any more.  Just plain weird.  Even weirder that nobody seems to care; anyone who can do something about it that is.

Sun, 12/16/2012 - 13:36 | 3068784 Eally Ucked
Eally Ucked's picture

Of course it's possible you just have to find more slaves producing goods allover the world (they are very hard to find nowadays) supplying US for free and we develop services making sillicon boobs and fake nails+banks+military hardware.

Still I don't understand something US deficit on average 133 bln per month and maniac buys something around 85 bln per month where the rest is coming from? 

Sun, 12/16/2012 - 15:55 | 3069049 hooligan2009
hooligan2009's picture

depends if you mean "per capita GDP" in which case (barring wars, pandemics or martian invasions" GDP will grow at the rate of increase in the (increasingly aging) population. 

now, if you are a realist, there simply isn't enough water and food to keep cleaning up the shit the species produces or the greenhouse methane gases being "farted" out. When there were just a billion people farting 6 times a day, it wasn't a problem..when it's 6 billion..the arctic melts, when its 12 billion..well, you will be able to get a tan in the antarctic!!! 

diminishing returns is already evident. we don't create wealth or value..we either allow corporate bodies to kill us off ...or..we settle for a smaller (non-obesity creating) share of the same ..ummm...marie antionette.

Sun, 12/16/2012 - 12:20 | 3068604 spinone
spinone's picture

The status quo works for those at the top, with the power and influence.  The currency, on the other hand, is debt saturated and broken.  Our debts are their assets, so debts will be preserved, just like in Greece.  I think we can reasonably predict the status quo will be preserved at the expense of the currency, and the population at large.

Sun, 12/16/2012 - 13:20 | 3068752 disabledvet
disabledvet's picture

actually you can "unreasonably assume that." every dollar in you pocket is being MASSIVELY devalued. there is something called "Peak Value Theory " this research was pioneered in the science of "rope creation." much of the technology in creating "super strong fibers" is still propietary...what we do know "it's only as strong as its weakest link." once one of the fibers starts to breaks...all the others will follow suit. in the context that "a dollar is made out of fiber" what is the breaking point now that we are "stretching it to the MAX." as with rope "there a multitude of weak links." for example the trade deficit, the budget deficit, the monetization scheme itself, the war, the resource dependency, public pronouncements that do not support the dollar, mass shootings, the power of the media, etc...etc. all places "stresses" on the various strands that "hold the value of the dollar intact." as we continue to...ahem..."stretch our dollar"...(FORCING economy on the people)...breakages start to occur ("i will not sacrifice Medicare"..."i will not sacrifice tax hikes on the rich"..."i will not contain the war effort"..."i will not put the debt on a sustainable path to repayment") all combine to "break the strand." hence "an extreme event" (Hurricane Sandy for example) having an "outsized impact" far out of proportion to its actual "reality."

Sun, 12/16/2012 - 12:31 | 3068638 Theosebes Goodfellow
Theosebes Goodfellow's picture

The problem isn't the currency. You could have gold as the currency and it too could be debased. The problem is moral leadership. That is what of which there is a dearth.

Sun, 12/16/2012 - 15:43 | 3069019 Alexandre Stavisky
Alexandre Stavisky's picture

The only checks and balances upon such a failure of moral leadership are independent strict & honest accounting and routine audits, sound currency, and bank runs.  Bankers and financial managers must always fear the depositors/investors smelling fraud and pulling all their stored values (constrained by some physical good or commodity).  That ends their careers and vaporizes their business.  If the law also takes action giving sentences upon conviction and making lifetime bans on bad actors resuming work in the financial industry, then the economy can still prosper.

Even the illogical math of usury doesn't blow up economies as quickly as state-sponsored fraud, unbacked emissions of extensive credit, and dilution of the money stocks.  THE GFC came about due to a rate of increase in the ability of bad actors to plunder which far outstripped the creative destruction built into the usury equation.

Make no mistake, this is an international take-down.  First goes down Edo (Nihon) and then all will be able to share in Uhka (8+11=19 (S)), the red man, american indian, USA.

Russo Venician makes the push. Assets go East.

Sun, 12/16/2012 - 15:59 | 3069056 TWSceptic
TWSceptic's picture

Debasing gold as currency, please tell me more I'd like to produce gold out of thin air.

Sun, 12/16/2012 - 16:06 | 3069075 jerry_theking_lawler
jerry_theking_lawler's picture

how does one 'debase' gold....are you Merlin and do you have the secret to alchemy??

Sun, 12/16/2012 - 16:42 | 3069147 OneTinSoldier66
OneTinSoldier66's picture

So, Rome and their Senators didn't debase their precious metal coinage? What would you call what happened to our coinage here in the U.S. in 1965 for quarters and dimes, and in 1982 for pennies?

Sun, 12/16/2012 - 18:00 | 3069324 foofoojin
foofoojin's picture

: to lower in status, esteem, quality, or character
a : to reduce the intrinsic value of (a coin) by increasing the base-metal content

b : to reduce the exchange value of (a monetary unit)


Tue, 12/18/2012 - 06:06 | 3074132 MeelionDollerBogus
MeelionDollerBogus's picture

no reason debased gold can't go to refining to purify it again. It's merely a matter of energy cost & skill, the only barrier being if someone insists you can't have it at an affordable trade for what it is.

Sun, 12/16/2012 - 19:55 | 3069544 babylon15
babylon15's picture

I had to reply to this.  Because it's true.  The only reason gold had value in the past is because the status quo said it had value; because they had it in abundance.  There are dozens of other precious metals that are basically worthless despite their scarcity.  Scarcity alone does not make something valuable.  When the status quo said seashells had value, people wanted seashells.  When the status quo said wheat had value, people wanted wheat.  When the status quo said ivory had value, or silk, or salt, then this is what people wanted.

Plus, if you don't believe, look up the collapse of the Spanish empire.  Conquests in the new world led to Spain having the biggest gold reserves in human history.  The result?  Hyperinflation, and everyone quit their jobs because they thought they were rich.  The economy went into the toilet and Spain never recovered.


From Wikipedia:

During the 16th century, Spain held the equivalent of US$1.5 trillion (1990 terms) in gold and silver received from New Spain. Ultimately, however, these imports diverted investment away from other forms of industry and contributed to inflation in Spain in the last decades of the 16th century: "I learnt a proverb here", said a French traveler in 1603: "Everything is dear in Spain except silver".

Sun, 12/16/2012 - 23:33 | 3070103 r3phl0x
r3phl0x's picture

The fundamental root of gold's value to men is that, throughout history, beautiful women all over the world will put out for it.

Tue, 12/18/2012 - 03:42 | 3074059 MeelionDollerBogus
MeelionDollerBogus's picture

paper money can't be detected as debased at any given moment.

Gold & silver can be detected for weight, purity & volume and priced in trade as such.

I'll take 90% gold vs .9999 pure gold so long as I can test it to determine it's 90% and not 40% and so on. I CAN test it. Dollars look the same, the magic of theft works apart from the ones I'm holding.

Sun, 12/16/2012 - 12:05 | 3068572 AU5K
AU5K's picture


Sun, 12/16/2012 - 12:06 | 3068575 nmewn
nmewn's picture


You mean raising taxes on 200-250k and above will have no perceivable effect when overlayed on this chart?

Sun, 12/16/2012 - 12:09 | 3068586 Spastica Rex
Spastica Rex's picture

Let the "cliff" happen.

Hah - like it's even a "choice."

Sun, 12/16/2012 - 12:27 | 3068628 nmewn
nmewn's picture

The only "choice" in a debt based fiat system where the tax base has been completely and utterly destroyed (that would theoretically cover the amount of debt issued plus interest) is debt repudiation...the "fiscal cliff" is a government/media construct meant to distract the sheeple from their own malfeasance.

And Benny is still my bitch ;-)

Sun, 12/16/2012 - 12:34 | 3068649 DoChenRollingBearing
DoChenRollingBearing's picture

If the .gov bitchez tax us enough, you can always not earn anything and/or "Go Galt" by other means.  Being a creditor of any sort also looks dangerous here...  .gov and counterparty risk and all.  Debt repudiation may indeed be in the cards.

Cash and gold look good.

Sun, 12/16/2012 - 14:37 | 3068904 A Nanny Moose
A Nanny Moose's picture

Would you consider currency revaluation just debt repudiation by another name/means? Perhaps some combination of the two will happen?

Sun, 12/16/2012 - 14:52 | 3068937 DoChenRollingBearing
DoChenRollingBearing's picture

Could be, anything could happen.  I sure do not know.

Sun, 12/16/2012 - 13:06 | 3068714 Absinthe Minded
Absinthe Minded's picture

Screw it, let it come. At least every one will get boned. Maybe the rich don't feel it as much, but they still have to pay. Speaking of reform, why don't they tax dividends and capital gains at 40% on all gains above $500,000? That would take care of Grandpa Buffett and all these scumbags taking their dividends early to avoid paying taxes on it.

Sun, 12/16/2012 - 19:19 | 3069472 Yen Cross
Yen Cross's picture

 I would like my "fiscal cliff" seared with basil/

Sun, 12/16/2012 - 12:09 | 3068587 Clint Liquor
Clint Liquor's picture

I don't know why anyone is concerned. It's not like it's real money or anything.

Sun, 12/16/2012 - 12:33 | 3068645 toomanyfakecons...
toomanyfakeconservatives's picture

It's not real... certainly not according to the Constitution. After the traitors are arrested, the little guys will get to turn in ther green monopoly money for the new Treasury Note at a 1:1 exchange. Paper billionaires and computer screen zillionaires will get pennies on the dollar or jail time. 

Sun, 12/16/2012 - 12:16 | 3068601 Water Is Wet
Water Is Wet's picture

The Federal Reserve has many asshats and many lie abilities.

Sun, 12/16/2012 - 14:40 | 3068908 A Nanny Moose
A Nanny Moose's picture


Sun, 12/16/2012 - 12:17 | 3068602 govttrader
govttrader's picture

This chart is not about Bernanke or the Fed...this chart is about CONGRESS.  The public debt increase occurs when Spending > Revenue.  Congress directly determines the Spending portion of that equation, and indirectly (through tax rates) determines the Revenue side as well.  This post should be relabeled "the new normal chart as Congress doubles down."  The Fed has done a great job of allowing the US govt to finance its spending spree at record low interest rates.  The problem with an out of control credit card spender is not the bank who issues the credit is the person doing the spending.  If congress were to cut entitlment spending dramatically...then the debt problem goes away in a jiffy.

Sun, 12/16/2012 - 12:26 | 3068625 Tyler Durden
Tyler Durden's picture

"The problem with an out of control credit card spender is not the bank
who issues the credit is the person doing the spending"

The problem is when the invoice from the bank comes due, and when it realizes no payment will ever come. The bank, of course, are US taxpayers. But since at this rate the Fed will soon (3-4 years) hold all marketable US debt, at least it will all become one giant check kiting game: Fed buys all Treasury debt, and remits all interest on the debt back to the same Treasury, and everyone lived happily ever after.

What can possibly go wrong. Well maybe this:

And yes, you are correct that without some welfare state reform, the endgame is one.

Sun, 12/16/2012 - 12:37 | 3068657 DoChenRollingBearing
DoChenRollingBearing's picture

Nice chart, + 1.  Reform the welfare state (at least here)?  Not gonna happen anytime soon.  The endgame..., it's usually the last three minutes that matter the most.

Sun, 12/16/2012 - 17:00 | 3069201 max2205
max2205's picture

When the US goes to the IMF for a bailout, it'll be too late

Sun, 12/16/2012 - 13:49 | 3068811 Tsunami Wave
Tsunami Wave's picture

The thing is, even when the U.S. loses it's world reserve currency title, it will still play an "important" rold in the post-U.S. paradigm.  The British Pound was still pretty relevent after the end of World War II, and Spain's currency was also still in wide circulation after the end of the American Revolutionary war.


But then again, those countries didn't print their money to infinity after they lost their world reserve/trading status.  Who the fuck knows what will happen after the next reserve currency comes and the U.S. will continue its race to debase against it.  Or will all currencies fail?  That's when the Gold/Silver comes in I suppose..

Sun, 12/16/2012 - 14:45 | 3068921 hooligan2009
hooligan2009's picture

WRONG!!!!! you have fallen into the accounting for economies trap.

let's put it this way, you think that

GDP = C + G + I + (X-M)

when in fact GDP represents historic (not todays) value and should now be written

GDP = C + G + F + I + (X-M)

where F = federal intervention, you can work your own sums out for when the Fed exits or you can try and finesse the monetization of government expenditure (G) by netting off Fed intervention. 

Sun, 12/16/2012 - 12:18 | 3068606 blindchicken
blindchicken's picture

So, each and every resident of the USA owes some nominal 52000$. Question is, to whom? 

Sun, 12/16/2012 - 12:31 | 3068639 nmewn
nmewn's picture

Ummm, no.

The government owes it, they chose to spend what they didn't have. I don't owe jack-shit...they do.

Sun, 12/16/2012 - 13:34 | 3068780 disabledvet
disabledvet's picture

the Government says only "they owe it to themselves." Of course they only create PAYMENT for themselves as well. One of the oddities of the this "recovery" has been the lack of Government hiring. Government is in fact getting "smaller" if looked at from an empirical "jobs created" standpoint. yet this is while the USA is engaged in the biggest debt monetization in history while in the middle of a war? you would think "Government would be hiring." hmmmm. "i smell a rat." this strikes me as a "bank bailout by another name." as was famously said in the movie Patton "but i understand gentlemen we can still lose this war." the irony of course is "we may have to destroy the Middle East to save it." we shall see...

Sun, 12/16/2012 - 18:25 | 3069373 nmewn
nmewn's picture

Hmmm, interesting.

"the Government says only "they owe it to themselves. Of course they only create PAYMENT for themselves as well."

It may come to pass that there are two side by side currencies. One type of "script" for government employees and one for regular folk.

I wonder which will last longer ;-)


Sun, 12/16/2012 - 12:18 | 3068608 Habyarimana
Habyarimana's picture

A german would say "und ?" Live goes on.

Sun, 12/16/2012 - 14:41 | 3068913 hooligan2009
hooligan2009's picture

clear you already sold your soul to the company store..pick any junta, you will feel right at home

Sun, 12/16/2012 - 12:23 | 3068618 williambanzai7
williambanzai7's picture


Sun, 12/16/2012 - 12:31 | 3068641 Peter Pan
Peter Pan's picture

Ben thinks he has a black belt in black jack where he can double down forever without losing. So far so good but for how long? The truth is he is heading us towards a black hole.

Sun, 12/16/2012 - 14:20 | 3068868 brak
brak's picture

wish he'd do his FOMC press conferences wearing that mask, it'd actually be worth watching

Sun, 12/16/2012 - 16:40 | 3069149 palmereldritch
palmereldritch's picture

Hell, he lures ya.

Sun, 12/16/2012 - 12:24 | 3068619 j-dub
j-dub's picture


The good news that your chart exposes, as I see it, is that we have at least 12 years before we double our debt again. At that point, the chart may have some merit for your layperson's attention. Let's, at that point, revisit.  At your leisure, please bookmark this comment for 2024.

I ask you to please keep Zero Hedge free of debt-scare propaganda, but instead filled with subjects that might be of more immediate importance.   



Sun, 12/16/2012 - 12:50 | 3068684 j-dub
j-dub's picture

I didn't realize it was mandatory any more on ZH to leave a <sarc off> every single time.

Sun, 12/16/2012 - 18:15 | 3069349 foofoojin
foofoojin's picture

psy-ops working double time in here.  making the appearance that the forum is full of poeple that can not grasp sacasms drives out the poeple that can grasp sacasm. it lowers the percieved threashold of inteligence in the conversation. i scene alot of lost intelegence in the comments this last two years. it comes with the game.

also, you contributed to a conversation that alot of people would read because of the parent post and did it rapidly before psy-ops could interject there well crafted responce. they hate you know. thanks for taking one for the team.

Sun, 12/16/2012 - 19:47 | 3069518 Esso
Esso's picture

Yeah, it's that pesky ol' New Normal thingy, j-dub. Sam's Club has a good deal on <sarc off> tags. 1,000 for $29.96. Made in China, of course.

Sun, 12/16/2012 - 13:56 | 3068831 Tsunami Wave
Tsunami Wave's picture

Phew that's good we have 12 years before we double our debt again.. that's such a good thing. </stupidity>


Zero Hedge doesn't have debt-scare propaganda, it's filled with realistic case scenerios over where our banking system, economies, currency, basic freedoms, and other topics close to finance are explained.  There is no suppression of information, nor political constraint on any of the topics that are explained here.  It's a blog, semi academic journal, and news-commentary website that explains everything from every perspective. Go read an MSM blog/website if you don't like what you're reading.

Sun, 12/16/2012 - 15:47 | 3069029 LayPersonWatchin
LayPersonWatchin's picture

@ j-dub- leave my name out of this>>>> I don't even know you man.  :)

Sun, 12/16/2012 - 12:25 | 3068623 Peter Pan
Peter Pan's picture

This feels like speeding in total darkness. Deep down you know that you will either hit something bigger than yourself or that you will go over the edge.

Sun, 12/16/2012 - 12:25 | 3068626 A Lunatic
A Lunatic's picture

Even so, the can will be dragged a bit further down the road...........

Sun, 12/16/2012 - 13:24 | 3068760 hooligan2009
hooligan2009's picture

kinda makes you wonder why everyone is chasing such a rusty, kicked and dented empty tin of beans 

Sun, 12/16/2012 - 12:29 | 3068635 Burticus
Burticus's picture

I'll see your 16 trillion and raise you another 16 trillion...

That'll l'arn ya t' bluff!

Sun, 12/16/2012 - 12:56 | 3068693 Peter Pan
Peter Pan's picture

Every condom has its limits.

Sun, 12/16/2012 - 13:24 | 3068757 hooligan2009
hooligan2009's picture

only if you stretch the truth..which may not happen in Japan!

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