The IMF Reports: "Debt Is Good"

Tyler Durden's picture

Submitted by Simon Black via Sovereign Man blog,

Probably every kid in the world has at some point dreamed of having a time machine and being able to travel back to the past… usually to see dinosaurs or something like that.

Time travel is an almost universal fantasy. And if I could snap my fingers and turn the pages of time, I’d be seriously curious to check out the thousand-year period between the decline of the Western Roman Empire and the rise of the Renaissance.

They used to refer to this period as ‘the Dark Ages’ (though historians have since given up that moniker), a time when the entire European continent was practically at an intellectual standstill.

The Church became THE authority on everything– Science. Technology. Medicine. Education. And they kept the most vital information out of the hands of the people… instead simply telling everyone what to believe.

People living in that time had to trust that the high priests were smart guys and knew what they were talking about.

Interpreting facts and observations for yourself was heresy, and anyone who formed original thought and challenged the authority of church and state was burned at the stake.

Granted, human civilization has come a long way since then. But the basic building blocks are not terribly different than before.

Anyone who challenges the state is still burned at the stake. And our entire monetary system requires that we all trust the high priests of central banking and economics. Those that stray from the state’s message and spread economic heresy are cast down and vilified.

You may recall the case of Harvard professors Ken Rogoff and Carmen Reinhart who wrote the seminal work: “This Time is Different: Eight Centuries of Financial Folly”.

The book highlighted dozens of shocking historical patterns where once powerful nations accumulated too much debt and entered into terminal decline.

Spain, for example, defaulted on its debt six times between 1500 and 1800, then another seven times in the 19th century alone.

France defaulted on its debt EIGHT times between 1500 and 1800, including on the eve of the French Revolution in 1788. And Greece has defaulted five times since 1800.

The premise of their book was very simple: debt is bad. And when nations rack up too much of it, they get into serious trouble.

This message was not terribly convenient for governments that have racked up unprecedented levels of debt. So critics found some calculation errors in their Excel formulas, and the two professors were very publicly discredited.

Afterwards, it was as if the entire idea of debt being bad simply vanished.

Not to worry, though, the IMF has now stepped up with a work of its own to fill the void.

And surprise, surprise, their new paper “[does] not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”

Translation: Keep racking up that debt, boys and girls, it’s nothing but smooth sailing ahead.

But that’s not all. They go much further, suggesting that once a nation reaches VERY HIGH levels of debt, there is even LESS of a correlation between debt and growth.

Clearly this is the problem for Europe and the US: $17 trillion? Pish posh. The economy will really be on fire once the debt hits $20 trillion.

There’s just one minor caveat. The IMF admits that they had to invent a completely different method to arrive to their conclusions, and that “caution should be used in the interpretation of our empirical results.”

But such details are not important.

What is important is that the economic high priests have proven once and for all that there are absolutely no consequences for countries who are deeply in debt.

And rather than pontificate what these people are smoking, we should all fall in line with unquestionable belief and devotion to their supreme wisdom.

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SMG's picture

And that is why the Devil is called "the Father of Lies"

Radical Marijuana's picture

Energy is Spirit.

Entropy is Satan.

That is why an arbitrary minus sign was inserted into the basic entropy equations in thermodynamics and information theory, since "the Father of Lies" was able to dominate the social development of philosophy of science.

To look further back in history, "War was the Father and King of all." Since success in warfare was based on backing up deceits with destruction, civilization developed from the Father of War to the Father of Lies. There are level after level of fractal paradoxes to be discovered in those processes. There are NO fundamental dichotomies, and asserting false fundamental dichotomies are the greatest of all the lies.

Paradoxically, every system of understanding that asserts and promotes its absolute "Truths" tends to be lying more the more that it does that. Ideals based on false fundamental dichotomies are necessarily impossible, and therefore result in causing the opposite to happen in the real world.

A more scientific society should be based on the axioms that the only things that really exist are different systems of organized lies, operating organized robberies, and the only ways to perhaps make that be better is to develop better dynamic equilibria between those systems. However, the degree to which the dominant systems promote their false fundamental dichotomies, and related impossible ideals, is also the degree to which negotiating better balances becomes practically impossible.

There again, the history of warfare drove those fighting to become the most fanatical, and therefore, the world is now dominated by the biggest organized crime gangs, which can not negotiate better compromises amongst themselves, because they are internally dominated by the most criminally insane people, who are who they are due the selection pressures of history picking those who were the best at being dishonest, and backing that up with violence, to become the ruling classes of their own systems.

Ponerology is the most paradoxical of sciences, because it is the study of military ethics, which is the most paradoxical aspect of militarism, which is the supreme ideology, which operates through infinite tunnels of deceits.

LawsofPhysics's picture

Don't overthink this, be happy, because that which cannot be sustained, won't be, regardless of what any species "thinks" or "believes".

fonestar's picture

Does anyone else remember voting for the IMF?

zaphod's picture

People voted for the IMF the same way european serfs voted for the EU.

Example: The UK never voted to be in the EU. The last time there was a referendum they voted to form a 6-country trade agreement, that was it. They never voted for the 20+ countries of today or anything beyond a simple trade arrangement. Now the EU rules over all important decisions from immigration to welfare. 

Reckonball's picture

I do!...I'm pretty sure,they were on the same ballot as the electoral college canididates..

Ying-Yang's picture

"My fate is to live among varied and confusing storms. But for you perhaps, if as I hope and wish you will live long after me, there will follow a better age. This sleep of forgetfulness will not last for ever. When the darkness has been dispersed, our descendants can come again in the former pure radiance."

Petrarch 1340 - Describing the Dark Ages

lasvegaspersona's picture

' pontificate what they're smoking'...huh?..mine English not understand

Radical Marijuana's picture

"And rather than pontificate what these people are smoking, we should all fall in line with unquestionable belief and devotion to their supreme wisdom."

If you are seriously asking, lasvegaspersona, the English idiomatic expression in the last sentence of that article above refers to the presumption that someone who is saying such silly things must be on drugs, in particular they are dopy from having smoked dope. The standard prejudice is that people are silly after they smoke marijuana, and therefore, what they say does not make sense, but rather is goofy nonsense because they are "stoned" or "high."

To pontificate about what the IMF are smoking would be to run out the stock phrases about how they must be stoned, due to whatever they were smoking, in order to spout such utter nonsense, in their reports.

So Simon Black is saying that rather that the readers of the IMF report wondering about what the IMF authors were smoking, in order to be so stoned as to spout such nonsense in that IMF report, the IMF is presuming that we are all supposed to take the IMF views as gospel truth, since it issues from such an authority in the globalized State Religion system as the IMF.

Simon Black is playing a cute turn of phrase, by using the word "pontificate," which is associated with the utterances of the authority of the Catholic Church, associated with asking what the IMF authors are smoking, in the sense of saying their report is silly nonsense, like a stoned person would say, and then flipping that back through Black's theme that the IMF operates as if they were the High Priets of the State Money System Religion.

tip e. canoe's picture

Simon Black is playing a cute turn of phrase, by using the word "pontificate,"

speaking of cute turns of phrases:

"Marihuana or Marijuana" appears to be the Spanish name for Maria and Juana (Mary and Jane). A derogatory "buzz" word used to stigmatize minority cannabis users and jazz musicians. Especially Mexicans. After Hearst Publications lost hundreds of acres of forest to Mexico. Hearst started smearing Mexicans. Mary Jane was supposedly Randolph Hearst arch enemy Poncho Villa's "prostitute, girl friend or some have said she "serviced Poncho and his men".

The constant reference in headlines of yellow journalism. This marihuana would make the lily white daughters of South Western state citizens become as loose as Poncho's whore "Mary Jane". It not only stigmatized the Mexicans and sided with the isolationists fearful of Mexicans crossing the border, stealing jobs. It kept the word cannabis and hemp from the stories. Lumping them all into one convenient item to prohibit.

With the discovery of an easier method of extracting fiber from hemp it also aided corporations in keeping competition off the market, ie; Dupont, Monsanto, Rockefeller Oil, and the Pharmaceuticals and newly legal Booze Mfg. Conspiracy or Coincidence? Regardless it worked and now we are re-discovering the medicinal and food, fuel and fiber properties of cannabis. Still fighting the same yellow journalists and government propagandist.

just a thought...

Radical Marijuana's picture

Yeah, the "Marijuana Party" was aware of that history when it decided to register officially under that name. The word "pot" was also derived from Mexican Spanish slang. In many ways, the words "Radical Marijuana" are analogous to "Crazy Nigga."


More miscallaneous links to History of Prohibition

Divided States of America's picture

Yeah and robbing our future generations is also good too right??....except our future generations have their ears plugged with the current mindless meaningless trash music and only worried about when the newest Iphone or Ipad is coming out.

NOTaREALmerican's picture

Re:  except our future generations have their ears plugged with the current mindless meaningless trash music

Unlike the past generations which had brilliant music, like:  The Horse with No Name.    It's good to be out of the rain is so lame.   But the rain caused a slow down in economic activity so he couldn't remember his name.

Jumbotron's picture

Alchemy and perpetual motion.

Oh yeah......that's a sure fire winner of a combination.  Nothing can go wrong there.

The Limerick King's picture



The world is addicted to debt

The most dangerous drug you can get

The patient will die

By removing the high

Is that any reason to fret?

The Limerick King's picture

Which gutless pansy junked me??? State your case moron!

Dr. Richard Head's picture

I didn't but that Crocodile drug is a wee bit more dangerous.

The Limerick King's picture

Not even close! How many is Crocodile going to kill???

Skateboarder's picture

He was either a paid shill, colorblind, or up to his neck in credit card debt.

redpill's picture

I think it was Christine "everyone should pay a shitload of taxes to bailout banks even though I don't pay a dime out of my IMF cartel salary" Lagarde

kito's picture

wow the King cant handle the discontent in his perceived kingdom!!

The Limerick King's picture

I should have expected that...  ;-)

fonzannoon's picture

I junked you for jumping on the china/treasury thread with this worthless post

The Limerick King
Vote up!

1 Vote down!


Holy shit...when did all these status-quo Klepto shills start organizing their asinine posts...complete with green arrows???


You added nothing to a legitimate conversation that people were having. All you did was go on some random ad hominem attack and try to make people asking legitimate questions look bad. It was beneath you.

Other than that, love your work.

Divided States of America's picture

fonzy junking ppl??? haha...i never expected that!...btw, where the fuck is kito? havent seen that guy in ages.

lasvegaspersona's picture

I junked you because I'm confused about who was junking who and why....and you were the closest red arrow...

Divided States of America's picture

Yeah thats fine, I am probably one of the biggest recipients of junk on ZH...aside from that fonestar guy and the siamese twins VD and flakes. Anyhow I dont know why you guys are fighting and junking each other over this when technically we are all on the same side....I mean stop fighting over something trivial (China dumping treasury) when we know damn well that the data reported may all be misleading lies anyways...No point of arguing especially when the boat we are all on is slowing sinking.

I never knew Limmerick King is one of the Tylers...but his rhymes are pretty good imho.

kito's picture

holy crap! its a status quo shill conspiracy against the tyler shill, replete with the ability to print red arrows!!! 

The Limerick King's picture

I was speaking to your ridiculous assertion that there is a legitimate treasury market out there...delusional! Between the US, Japan, BoE, China, and the supporting cast of TBTF banks, they've printed/created tens of trillions in new debt-fiat...if you think much of that flowing into treasuries through back-doors means there is a real demand for that worthless're sadly mistaken.  

fonzannoon's picture

my posts had more to do with ZH's assertion that foreigners are dumping treasuries, which that report clearly illustrated was not happening. That's not the point's too bad you could not have just just posted this reply instead of taking the route you did. Then you get all pissed off when someone junks you.


The Limerick King's picture

I'm not pissed off...just having a bit of fun in the fight club comments section...which I've missed.

I seem to recall it being about CHINA dumping treasuries...which they did...and if they keep doing it is a bit of a problem...don't ya think?

fonzannoon's picture

define "dumping". go look at the chart of china's treasury holdings and tell me which way it's going.

and happy to help. this place needs more fight club. But attacking the messenger is bush league. I did not expect that from you.

The Limerick King's picture

It's your message that's the problem. I was also reading a lot of disrespect from you on other posts...therefore expect none in return. It's never bush league to call out an apparent shill for the criminal fuckers who hate this site. If they were here...they would be saying and acting just like you. 

fonzannoon's picture

"An apparent shill for the criminal fuckers who hate this site". Nice. All you can muster up on  the actual subject is that "the message is the problem". Outside of that all you can do is go ad hominem.

One could sit here and say that you are just a retarded guard dog for Tyler who can only rhyme and insult to people, because it appears that is all you are really capable of.

kito's picture

limerick is full of prose and poetry, but not much else. he continues to duck the question, what constitutes "dumping"? chinas holdings have barely moved. period. fact. 

Meat Hammer's picture

I thank you fonz and kito for upsetting the apple cart.  I, too, bark into the echo chamber and rarely challenge the Tylers. Sometimes one needs a blast of cold water in the face to make sure all the senses are awake.

The Limerick King's picture

They're just a couple of Krugman's trolls...

fonzannoon's picture

That's all you got man eh? Wow that is weak.



The limerick king is a shmuck. who rhymes from his old pick up truck. he thinks tyler's cool. he years for his stool. and fonzannoon don't give a fuck
kito's picture

wow fonz! you can rhyme and maintain critical thinking skills!!! more than we can say for the King. 

The Limerick King's picture



Fonzi & Kito are shills

Handing out Krugman's blue pills

They act as a team

It's part of their scheme

But logic ain't one of their skills

fonzannoon's picture

sorry to see you are an empty can when it comes to substance. Good luck with your style. It's average at best.

The Limerick King's picture

If you ever stop talking nonsense by insinuating there's nothing wrong with a totally manipulated treasury market...and wish to discuss something sensible...let me know.

fonzannoon's picture

Tell me when I said there is nothing wrong with it? Tell me where I "insinuated" that. Tell me where I was "disrespectful". Yes I am pointing out that ZH analysis seems to be incorrect. I am bringing stuff up in an attempt to hash it all out. I am also pointing out that ZH seems to be going in the unfortunate direction of Michael Snyder crap articles, and others like it. Sorry if that is disrespectful, but it's reality.

You are another one who can't understand the difference between pointing something out and endorsing it. It's amazing. Lucky for you my real passion is my hobby, I will continue to work with you and maybe you will end up coming around.