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Guest Post: The End Of The Line?
Submitted by AWD via The Burning Platform blog,
Maybe 2015 will be the year of the collapse.
Our entire economy runs on debt creations, vis-a-vis financialization, since we import $500 billion a year more than we export.
2015 is the year when increasing debt results in ZERO GDP growth. The end of the line. But that won’t stop the Federal Reserve and the criminals in Washington. Enjoy what time we have left before it all collapses.
Government Intervention in Economic Downturns…Makes Things Worse
Every time government intervenes in an economic downturn, the downturn (or recession) gets longer, and deeper. History has borne this out, yet politicians can’t resist the impulse to “do something” when recession comes. Left to its own devices, the economy will recover much more quickly than if we tinker with monetary policy or inject massive amounts of taxpayer dollars into the equation. Thomas Sowell makes this case one more time in a piece at Townhall:
The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.
During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.
No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.
The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then– and now.
The Keynesians that are busy trying to turn the magic levers in our economy right now still aren’t getting the message, more than two years later: government spending can’t make the economy grow. Until they stop trying (and racking up immense, almost unfathomable amounts of debt), things are likely to continue to get worse. What we need is some level of certainty about policies that the current administration is trying to enact. Businesses don’t invest in growth, and thus hire new employees, because they don’t know what’s going to happen.
The policies of this administration make it risky to lend money, with Washington politicians coming up with one reason after another why borrowers shouldn’t have to pay it back when it is due, or perhaps not pay it all back at all. That’s called “loan modification” or various other fancy names for welching on debts. Is it surprising that lenders have become reluctant to lend?
Private businesses have amassed record amounts of cash, which they could use to hire more people– if this administration were not generating vast amounts of uncertainty about what the costs are going to be for ObamaCare, among other unpredictable employer costs, from a government heedless or hostile toward business.
As a result, it is often cheaper or less risky for employers to work the existing employees overtime, or to hire temporary workers, who are not eligible for employee benefits. But lack of money is not the problem.
Uncertainty is killing opportunities for growth. We don’t need more government intervention in the form of stimulus, or easing, or regulation. We need to government to get out of the way.
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The end is nigh! Get your guns, gold and tinned beans, Zerohedgies, and run for the woods!
Ahhhhhhheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee...
YOUR ANALYSIS IS ALL WRONG! Run the series from 2002-Present and redraw the regression......duh.
/sarc off /sarc off /sarc off
its stuck. damn.
QE and more debt was never about growing the economy...and interest rates will keep going down and debt will keep going up. behold what has been and what, by extrapolating, (using my handy dandy Birinyi ruler) will be. Oh, and by the way, no country or serious actor will ever choose to end the game or hold the US accountable for massive debt creation. They are in collusion of self interested parties. As unbelievable as it may seem, interest rates will only go down and dollar will not collapse...and so goes the new era of serfdom.
'08
'13
Couple things to notice here -
1- "Foreigners" have purchased more T's than the Fed via it's QE since '08...even w/ all the talk of Russia or China abandoning the dollar, the exact opposite is happening in their T holdings (Russia up 3000%, China up 125%)...I really wonder if they are simply being given currency swaps with which to purchase the T's (ie, they put up nothing and have nothing to lose buying these T's...they are playing w/ Fed house money???)
2- the vulnerability to the dollar is greater (or less) than ever dependent how you look at it. Never have foreigners owned more total or % wise of US T debt...which either means a sell off creates more of an interest risk than ever...or the co-dependency means "foreigners" will continue to buy ever greater % of currency to avoid the much anticipated "dollar collapse"...fuck if I know.
3- in another 5yrs from now if these trends were extrapolated out, could look like...
'18
Well there is that little problem that is called the ACA. If I were to do a LINEAR ANALYSIS of Health Care Costs as a Percentage of GDP I can Demonstrate br extrapolation that the growth in those costs will require the ENTIRE GDP of the USA by 2018.
We will not last that long. (See Karl Denniger's analysis.)
Have you ever heard the adage that "The Trend is you Friend?" With friends like these just whom needs enemies?
And I do not ascribe to LINEAR Regression when it concerns Exponential Functons. While the Linear Model works for quite awhile when (NOT IF BUT WHEN) the Breakdown happens then the Daata Points deviate from the Linear Model quite rapidly.
The innumeracy in the United States is ABYSMAL. What type of Growth has there been in Federal Reserve Bond Purchases?
What type of Growth Model do you Data Points fit?
Exponential Growth leads to Exponential Collapse. You can deny that reality if you so shall choose. But I will guarantee that you will not be able to deny the CONSEQUENCE of the reality.
Enjoy...And have a nice day.
The Short term Trend shows China's UST holdings peak in May 2013, and since has been a net seller of UST. All Foriegn UST holdings peaked in April 2013 and is now declining:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/...
1. I also think the Fed has may have been using currency swaps to get foriegn central banks to buy US treasuries. The Fed is missing $9 Trillion. My guess is that a big chunk of this cash was handed over to Foriegn CBs to buy UST for them.
2. Foriegn consumption of UST is unsustainable. Sooner or later we will breach the tipping point and UST will be dumped. All it takes in one significant holder to start dumping to send the rest into dumping mode. Like any ponzi market, the first investors that get old get burned the least. China has been buying up lots of physical gold and stockpiling even base metals like copper. I think they are preparing for a dollar collapse.
The US GDP figures are pure fiction. Real US GDP (excluding Fed, State, and Local Gov't) is nearly half of the figures Washington publishes.
"since we import $500 billion a year more than we export."
Did you add in all the inflation that we export?
Ok, just kidding.
Over.
Where is the inflation? Seriously.
Flak
I think you mean where is the 'price inflation' .....and it is all in equities.
Real inflation happens when you print more fiat...at least to Austrian economists.
I really don't think much of Austrian economics...
Lots of "inflation" over the past few years in tuition and healthcare, but that is another story...
Oil has increased, but that is cost push inflation, the Bakken and EFS wer never going to be drilled if crude was less than $75... Given how the price of oil feeds through the economy especially the price of food, you would expect prices to go up...
Let's put it another way, a commodity play that is not economical at a certain price does suddenly become economic due to "inflation". There has a to be a real intrinsic increase in the underlying value of said commodity...
Beef is still reflecting the abysmal corn/soya crop in 2012.... FWIW. I just picked up a 8 lb pork loin for $14 and a 7lb roasting chicken for $7...
The is also now a lot more bidders for what we used to consume, e.g. coffee
And you are all aware that the global increase in food supply is increasing more slowly than population... You are aware that global grain stocks have been near all time lows
http://www.circleofblue.org/waternews/2013/world/global-grain-reserves-are-low-legacy-of-u-s-drought/
2013 turned out to be a good year for corn, but
http://www.reuters.com/article/2013/09/30/us-world-grains-stocks-idUSBRE98T03720130930
There are endless links, but this is probably the most comprehensive data
http://www.fao.org/docrep/017/al998e/al998e.pdf
Stock-to-use ratios are still falling...
To make a long story short, the US is starting to be outbid for more than oil...
Plunging velocity of money is hiding the impact. Obviously it's in financial assets, but if the QE ever got disgorged and velocity increased, my god would the impact be epic.
Flak,
Have you been to the fucking grocery store? Even assholes have to eat.
Not true. Self-righteous (and self-serving) statists have been known to exist for decades if not hundreds of years by merely repeatedly returning to their own vomit and endlessly recycling their own bullshit.
That is graphic yet oddly true...gonna have to steal that line from you once in a while!
Is it inflation if the rest of the world world is starting to outbid the US for food?
Stocks-to-use have be falling for a number of years...
Pg. 31
http://www.fao.org/docrep/017/al998e/al998e.pdf
Lows & Home Depot
Debt based currency is by its very nature, inflationary.
Unless you believe the govt approved figures....
Home prices up 10% yoy - and housing is 30% of CPI (owners equivalent rent 25% and rents @ all time highs)...and somehow BLS claims inflation of 1.4%...guess the rest of the inputs must be incredibly negative...inflation is everywhere but counted nowhere
This is the simple truth....however power mad meglomaniacs will never admit it...and so it goes on and on
If a ponzi scheme serves it's members well, at some point, doesn't it become the responsibility of those running the scheme to do what they can to continue it? At the point where a collapse of the scheme would cause suffering to the masses, is it not just to prevent generations of suffering?
I would like to believe a laissez-faire economy could exist with perfection, but anyone with a brain knows it would result in wealth imbalance even greater than nearly any centrally maintained economy. Gold standard? Read up on it's history to figure out what a grand idea that would be (yes that's sarcasm).
Federal debt only exploded after Nixon closed the gold window instead of cutting welfare and the Vietnam War. What grand ideas those turned out to be (yes that's sarcasm). Now, $17 Trillion later, we've reached the end of the debt road.
Federal debt exploded under Reagan. here is 60 years of US Gvt debt-to-gdp...
http://www.tradingeconomics.com/united-states/government-debt-to-gdp
or here
http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php
and
http://www.usgovernmentspending.com/spending_chart_1900_2018USp_XXs1li111mcn_G0f
Not good on your part to make shit up...
Bunz, I have not infrequently seen gross ignorance on parade here, but it is good to finally meet the grand marshal of that parade himself.
That's OK Bunz, ignorance is bliss and besides the grand marshall usually has a pretty girl with big tits beside him on the float.
I'm sorry "Government spending can't make the economy grow..."
That's meant to be a joke right? It may not be a sustainable method of growing an economy, but by definition it most certainly does grow an economy.
Re: It may not be a sustainable method of growing an economy, but by definition it most certainly does grow an economy.
And it definitely helps those of us living off of the Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-Ed, Big-House, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState scams.
Maybe he was talking about holistic growth, or somethin'.
I hope you keep that list in a .txt so you can copy/paste it quickly. It does help those people, yes. What's your point?
He meant 'value-added'(as in higher standard of living) growth, I'm sure.
The government spending on designing and building the internet, water mains, sewer pipes, roads, rail, airports and seaports doesn't grow the economy?
I know its popular to beat up on the government right now, but lets not throw the baby out with the bathwater.
I like that the article focuses on all debt (or so I think). What is the source(s) of the graph?
I'm on board with the 2015 prediction.September. if I'm wrong I'm going to the mall, buying a second car, and taking out a home equity so I can take my family to the Caribbean.
Now you're talking!
Send the bill to Mr. Yellen, the QEeen!
A thought-provoking chart about the credit contraction:
http://www.creditcontraction.com/images/affiliate/Great-Credit-Contracti...
"The system does not collapse but evaporate."
Exter's Pyramid revisited...
I am taking my family to the carribean now, in case you are right about 2015
Me too fonz. As long as it holds together until spring, that is. I still think it will take longer than most on this site seem to think though. Gold is still too cheap for it to happen anytime soon.
2015 ? No way. I think it will all come down in 2011 -- or 2012 at the very latest. Yes, I remember telling my co-workers in 2010 that the situation could not get any more insane and there was no way they could keep the decrepit system from popping out like an old incandescent bulb.
2011. You heard it first here.
2008 was the year. They have been Exporting Inflation ever since. We are now living on the generosity (patience) of strangers. Call it the Mae West economy.
If 2015....'smart money'-'market' would be discounting it to ZERO today!
that is all you need to know to indicate....WE ARE FUCKED!
So if you're wrong its ride out the collapse at home with the one car?
Get a few student loans while you are at it. Might as well go "All In".
My call is no later than 2018, but the recent posturing by some of the Fed "leakers" (ha) makes me think odds may be shifting to sooner rather than later.
I think we should define the collapse criteria, though. Total banking implosion? Wealth Tax / banking haircut ala Cyprus? Dollar devalution > 40%? There are so many ways this event could play out while allowing TPTB to deny a collapse has occurred.
Wealth confiscation via mandatory purchase of t bills in all iras/401ks
That's a linear trend line. Using the Excel best fit tend line the 0.00 (dollar) hour is at Jun 18 2078 at 7:53pm. Prepare accordingly!!!
Aren't most sensible economic thinkers now calling the USA attempt to measure GDP a hoax! I mean how much of what they call GDP can be real wealth and life quality growth? Wars are GDP, Mom dieing of cancer is GDP, the vast and totally unproductive private health insurance industry is GDP, the list could go on. American GDP is a fake number that doesn't reflect standard of living or quality of life growth. As people grow poorer, the USA claims solid GDP growth. It's a lie.
I have been calling for collapse based on just what the poster has called out. Especially the constant 500 billion trade imbalance. Yet, the world shrugs it off and buys T-bills and goes long the dollar, they buy dollars to do trade, they give us goods in exchange for the green asswipe. It seems that this game will never end! Until it does. I now think it will be sudden, and nobody will see it coming. Ha! Ha!
Good show on PBS about Kennedy. The one hour story of his presidency and the day in Dallas. Though PBS backs all official lines on the murder, it is clear that the power that rule America today, are the ones who had to kill Kennedy. Since that day, we have been building up to todays fascist police state.
Yea, I watched that. They made pains to back Arlen Spector's one bullet theory. I was surprised they quoted Connally, and his wife, who both said it was the second bullet that struck him, not JFK. This would mean conspiracy. Yet, they nearly totally avoided Jack Ruby's involvement. Ruby is the proof that there was, indeed, a conspiracy.
Source ABC News, New York: The Joint Chiefs are the 5 generals and admirals in charge of the 5 branches of the U. S military. In 1962, those men were George Decker (Army), David Shoup (Marines), Georg Anderson, Jr. (Navy), Curtis LeMay (Air Force), and Edwin Roland (Coast Guard), along with a few others, all chaired by Lyman Lemnitzer (Army).
The entire board of the Joint Chiefs of Staff proposed, drafted, and agreed on a plan to concoct a casus belli for war against Communist Cuba, under Fidel Castro. Their collective motive was to reduce the constant threat of Communist encroachment into the Western Hemisphere, per the Monroe Doctrine.
This plan was named Operation Northwoods, and entailed the most impossibly indifferent cruelty ever envisioned by a government against its own people. In order to sway public sentiment in favor of the war, the Joint Chiefs planned to bomb high pedestrian-traffic areas in major American cities, including Miami, New York, Washington, D. C., and possibly Chicago and Los Angeles; to frame U. S. citizens for these bombings; to shoot innocent, unarmed civilians on the streets in full view of hundreds of witnesses; to napalm military and merchant vessels in port, while people were aboard; to sink vessels carrying Cuban refugees bound for Florida; to hijack planes for ransom.
Not only did every single member of the Joint Chiefs sign his approval of this plan, they then sent it to Secretary of Defense Robert McNamara for his approval, and then to President Kennedy. McNamara claimed years later never to have seen it, but that he would have rejected it. Kennedy, however, did receive it, and promptly called a meeting of the Joint Chiefs, in which he threatened, with severe profanity, to court martial and incarcerate every one of them.
The President cannot actually do this, but can order the Congress and military branches to do so, and in these circumstances, they most certainly would have. But Kennedy decided that it would cause irreparable disrespect around the world for the U. S. military. He did remove Lemnitzer from his position as Chairman and assign him as Supreme Allied Commander in Europe, not much of a demotion.
Theorists claim that the military may have had a hand in Kennedy’s assassination because of his blistering rebuke of the Joint Chiefs. This remains unproven.
However, the official records reveal that one man stood against this heinous plan… and that this man was dead within months.
Many will say that the Kennedy assassination happened decades ago, that it no longer matters.
It matters. For we know that no president since JFK has dared to buck the military-intelligence-industrial complex. We know a Pax Americana has spread its tentacles across the globe with U.S. military in over 130 countries on 750 plus bases. We know that the amount of blood and money spent on wars and war preparations has risen astronomically.
http://hongkong.asiaxpat.com/features/jfk-assassination.html
Yes, and never mind that he "authorized" treasury to issue debt-free currency, or that he appointed his baby brother AG. He went against his father, Joe, a kingpin in the fascist mob. Who killed JFK? It's almost a better question to ask who, in the oligarchy, didn't want JFK/RFK dead?
Duh
2015 is the year when increasing debt results in ZERO GDP growth.
GDP Growth has been negative for nearly a decade if you use accurate inflation data If you correct official inflation upwards by just 1.7% for the last decade (Shadowstats says it should be corrected upwards by at least 4%) then growth has been zero for a decade Why are we waiting for 2015?
http://www.shadowstats.com/alternate_data/inflation-charts
Ask a physicist to explain the multiverse...
(because this about the best about the best evidence I've come across to support the theory)
Who the hell ever said growth was the goal of this money creation? Stupid SOB. This is about making sure that certain elites are locked in permanent positions of power. That means a lot of wealth transfer. From the poor and middle class to the upper class. How the hell does anyone not get this simple concept at this late date?
This is the new Dark Ages, just with iPads. There will be no mobility between the classes for most people unless they posess some extrodinary skill. That's where you're born, that's where you'll die. Debt, centralized control schemes and taxes will see to that.
Holy shit, you mean you'll have to work and educate yourself to find out what skills you are good at that are in demand?!?! Oh, my goodness, why would we want that to be!?!@?#
Settle down.
Nonsense; there will certainly stll be class mobility.
People will readily, easily and often drop to a lower socio-economic class.
Maybe 2015 will be the year of the collapse.
Do we have to wait that long? This is getting agonizing!
Context my friend. The Collapse has been underway FOAR a while now.
bout twelve years, two months, three days if I was going to pin it to a day.
But that's just in a smaller scale because there is a Day of Infamy one could very easily look to as the starting point of this ongoing, existing, no-need-to-wait, collapse.
and an interim date falls 50 years ago this nov the twenty second. a new arrival on the scales to point to no doubt, but not to be ignored for its significance.
the way the camera follows us in slow mo
the way we look to us all
oh yeah
-----
these are the days
of lasers in the jungle
lasers in the jungle somewhere
Stacatto signals of constant information
a loos affiliationn of millionaires and billionaires and babay...
... _ _ _ ...
I'm now officially insane, 'cos I comprehend what you, and blindman and slewie (rip) are trying to say. May Kilgore Trout live long and prosper.
you're sane well enough.
slewie died?
Re: Slewie. Can't say, but he's dead in this realm, in the figurative sense. I reckon slewie just got tired and moved on.
i miss slewie.
but lets face it u cant blame him.
anyone here had a warning email yet?
Sorry for not checking back on this thread sooner, but I miss slewie, too. As far as warning emails goes; no, not me. Wasn't aware you'd get a warning, actually. I thought this was supposed to be fight club. Who gets kicked out of fight club? (I know)
slewie, lol.
Slewie the PieRat!
Over.
Yeah, slewie had what I call intellect. Ya' never knew exactly where he was goin' but you knew it had a purpose, and you felt he wasn't malicious. "You" being "me", in this case.
Ditto for blindman. Seems like crazy rants until you look into the context.
Then there's WB7's stalker, janus.- another one who flew over the cuckoo's nest, I reckon.
I don't know enuff about you, Bing, to make a judgement (admit it, we're all judgemental) but so far, you seem like a court jester.
Don't let that stoke your ire. It's just my opinion- just now.
edit; For the record, it was slewie the pi-rat. I figure that particular phrasing meant something to him, kinda like acetinker and a donkey on a dinghy has significance to me. Why does RunningOnBing mean something to you?
bullshit. gdp is whatever the gubbermint says it is.
+1
You forgot to compensate for the fact that all the economic data is bullshit and they can change whatever variables they want in the calculations to make that chart look however they want it to look.
With all due respect to the author, haven't I been reading one of these every November for the past 5 years?
Ok Batman, WTF happens when Keynesianisms fail ?
I mean, WTF is at the end of the rainbow ?
WTF Do you mean, 'No Pot of Gold'
My Pension is Assured, OK ?
My Social Security is good yeah ?
Why are you backing away ?
Ok Batman, WTF happens when Keynesianisms fail ?
I mean, WTF is at the end of the rainbow ?
WTF Do you mean, 'No Pot of Gold'
My Pension is Assured, OK ?
My Social Security is good yeah ?
Why are you backing away ?
Fed policy will ensure that we never have any real growth, and with their ability to manipulate data the Fed will ensure that GDP will always grow -- just a bit -- but never enough.
The US economy can be influenced by the FEd but it is the rest of the world that decides our fate. They decide if they will continue to support the dollar by buying (or just not selling) our Treasuries. We have lost control of our destiny.
Oh, but look at some of the "stuff" that we proles built- and destroyed- and rebuilt- and destroyed, ad infinitum from 1913 to 1971. Then, witness the "growth" of a consumer "economy" since '71, while we proles continued to destroy and rebuild... it's fkn insane, actually. Anybody wanna guess who benefitted most from all of that?
1US dollar = 70 US cents . There's your inflation .
The chart is shit.
If he's talking about just Government debt, we've been below zero 8 of the last 13 years.
http://research.stlouisfed.org/fred2/graph/?g=ot9
If he's talking about Total US debt, that's been net negative 60 of the last 62 years:
http://research.stlouisfed.org/fred2/graph/?g=ota
(Note the reason 2008 appears positive is because debt growth was negative)
Either way, the horse is already gone.
Source ABC News, New York: The Joint Chiefs are the 5 generals and admirals in charge of the 5 branches of the U. S military. In 1962, those men were George Decker (Army), David Shoup (Marines), Georg Anderson, Jr. (Navy), Curtis LeMay (Air Force), and Edwin Roland (Coast Guard), along with a few others, all chaired by Lyman Lemnitzer (Army).
The entire board of the Joint Chiefs of Staff proposed, drafted, and agreed on a plan to concoct a casus belli for war against Communist Cuba, under Fidel Castro. Their collective motive was to reduce the constant threat of Communist encroachment into the Western Hemisphere, per the Monroe Doctrine.
This plan was named Operation Northwoods, and entailed the most impossibly indifferent cruelty ever envisioned by a government against its own people. In order to sway public sentiment in favor of the war, the Joint Chiefs planned to bomb high pedestrian-traffic areas in major American cities, including Miami, New York, Washington, D. C., and possibly Chicago and Los Angeles; to frame U. S. citizens for these bombings; to shoot innocent, unarmed civilians on the streets in full view of hundreds of witnesses; to napalm military and merchant vessels in port, while people were aboard; to sink vessels carrying Cuban refugees bound for Florida; to hijack planes for ransom.
Not only did every single member of the Joint Chiefs sign his approval of this plan, they then sent it to Secretary of Defense Robert McNamara for his approval, and then to President Kennedy. McNamara claimed years later never to have seen it, but that he would have rejected it. Kennedy, however, did receive it, and promptly called a meeting of the Joint Chiefs, in which he threatened, with severe profanity, to court martial and incarcerate every one of them.
The President cannot actually do this, but can order the Congress and military branches to do so, and in these circumstances, they most certainly would have. But Kennedy decided that it would cause irreparable disrespect around the world for the U. S. military. He did remove Lemnitzer from his position as Chairman and assign him as Supreme Allied Commander in Europe, not much of a demotion.
Theorists claim that the military may have had a hand in Kennedy’s assassination because of his blistering rebuke of the Joint Chiefs. This remains unproven.
However, the official records reveal that one man stood against this heinous plan… and that this man was dead within months.
Many will say that the Kennedy assassination happened decades ago, that it no longer matters.
It matters. For we know that no president since JFK has dared to buck the military-intelligence-industrial complex. We know a Pax Americana has spread its tentacles across the globe with U.S. military in over 130 countries on 750 plus bases. We know that the amount of blood and money spent on wars and war preparations has risen astronomically.
This can go on as long as the Saudis take dollars for oil.