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Here's A Chart You Won't See On CNBC
"Record corporate cash"..."Record corporate cash"... "Record corporate cash"
That pretty much covers most of the conversation on prime time financial media and TV stations when discussing corporate balance sheets.
There is, however, one big problem with that mantra. As Zero Hedge first showed in January with "Corporations Have Record Cash: They Also Have Record-er Debt, As Net Leverage Soars 15% Above Its 2008 Peak" companies indeed have tons of cash. What isn't discussed is where that cash came from. The answer: debt. Because while companies have record cash, they have recorder-er debt.
Today, we are happy that more are starting to notice this simple math problem. Here is Deutsche Bank's Torsten Slok who is the latest to be struck by this "revelation".
If you look at cash levels relative to debt levels you find that corporate cash holdings are at the lowest level in 15 years, see also the chart below. In other words, a very important reason why corporates have more cash is because they have taken on more debt via IG and HY issuance. Expect capex to accelerate going forward but keep in mind that debt levels for corporate America are at the highest level ever and there is a risk going forward that higher rates through debt-servicing costs and higher defaults could have a negative impact on the recovery and hence the terminal rate for both short and long rates.
Of course, as long as rates are low and keep declining, this record debt hoard is not a big issue.
Once rates start going up, however, nobody would possibly have been able to foresee the absolute massacre that will take place at corporations, levered with publicly tradable debt to never before seen levels.
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But looks like it's off the lows for the decade.
Borrow until they take away the credit card. No different than the typical US debt slave.
Part of the reason they are borrowing is to avoid taxation. They hoard cash overseas, then borrow money for operations in countries that tax their income. Nice little loophole not available to the average US debt slave.
Yeah, like Apple really needed to float that last dozen billion or so in bonds…
It has a net positive position and more real cash than the US government.
“In revolution there are two types of people: those who make it and those who profit from it.” – Napoleon
See: TBT, TBF, SJB, JGBD and many others!
MOAR ZIRP!!!!!!1111!!!!11!
Not gonna see it on Bloomberg either. They've been obsessed with basketball for the last two days. #destraction
You mean it was all <gulp>..... a LIE?
That... that's not possible.
I don't believe it. I WON'T believe it.
Sterling did nothing wrong. This whole thing is a farce. The National Black Association can juggle it's own monkey balls. Soon to be featured on BET and commented by Oprah and Arsenio. I'm watching European soccer games instead.
The Sterling debacle is just getting started... He has said he isn't selling... The drool is running down the lawyer's chins... Watch for him to sue everyone from the bimbo ex-girlfriend to the NBA...
12 ZH members have supported walküre's post. I'm not one of them.
Bloomberg TV runs the same program every day - Betty sucking up to oligarchs with the most annoying voice on television, and the red head sucking up to oligarchs with the occasional "now wait a minute" interjection to be sure no guest ever finishes a complete thought. And then there's Matt Miller. He must have photos of big Mike becuase he actually seems human, sane and capable of independent thought.
In war there are two types of people: those who make it and those who don't
In war there are two types of people: those who die and those who live the rest of their lives with PTSD nightmares
At Zero Hedge there are two types of people:
Those who pine away for WW3 and global economic collapse and those who make bank.
I see three types of people at ZH
The vast majority that DO NOT believe in all the ipse dixit bulllshit we are fed 24/7.
A handful that don't have a clue.
And.....those that may fit in the first category listed above, but have their own category as they would really, really like to punch Jamie Dimon in the face.
Just sayin.
Sir, I am but a lowly gardener, And I have more real cash than the US government.
The US balance sheet is a silk stocking stuffed with shit.
With images of a playdo press in my head. Thanks.
Talleyrand would do well in the current government. Led to slavery by snakes we are.
Then comes the canard of "tax relief" so American corporations will be incentivized to repatriate the cash under the illusion of expanding domestic investment (jobs).
Only after rate increases squeeze them, like 30 yrs ago.
This dramatically over-states cash (while not, of course, under-stating debt). As foreign 'cash' has to be reduced by 30%+ if it is to ever be paid to the benefit of domestic debt or domestic shareholders.
I'm not surprised though. All these CEO's think there's going to be some magic repatriation tax amnesty, which is quite doubtful. Meanwhile that 'cash' loses value with each passing year.
borrowing to pay out dividends and buy back stocks at bloated prices is great for future growth.....
but, only in the eyes of the top .0001%. this country is so rotten and corrupt, we're fucked.
"That's why I'm richer than you" - JDimon
That will be taught to our grandkids right along side with "Let them eat cake".
With Fuku blowing up an aerosolizing, let them eat and breath yellow cake.
yellow cake
with Mox fuel frosting
and plutonium sprinkles
With China and Russia looking like the good guys in the battle of wits with the current USSA regime, Woar becomes the final outcome.
World opinion is rapidly escalting towards siding with Russia. China is willing to finance whomever is willing to launch the first volley.
The USSA becomes the pariah and a well placed nuclear attack on NYC and Vichy DC has all the earmarks of being acceptable in the world's eyes.
Afterall, they had it coming...
Then it's on like donkey kong.
DaddyO
Spare NYC. Vichy DC can sink into a black hole for all I care. To even things out, blow up Hollywood for good measure. That would set things right for a few decades and mankind just may have a chance to evolve further.
NYC has already been targetted, Obozo told us himself...
Talking of which, what the hell just happened to the dollar ?
That will be taught to our grandkids...
I'll do my part.
And by the way, the sentiment was taught before the guillotines too:
7 When the wicked dies, his hope will perish,
and the expectation of wealth perishes too.
12 Whoever belittles his neighbor lacks sense,
but a man of understanding remains silent.
Proverbs 11: 7 & 12
jmo.
So just where is all this debt money going if it's not going into capex for future growth??
Oh wait....
Off topic....
Saudi Arabia shows off nukes... everyone loves a lil nukie!
Earlier today, at Saudi Arabia's northeastern military base of Hafr al-Batin, the kingdom's armed forces held a massive military parade to mark the conclusion of a major exercise codenamed "Abdullah's Sword." A surprise feature of the parade was the inclusion of two Chinese DF-3 missiles, known as the CSS-2 in NATO nomenclature. These missiles were supplied to Saudi Arabia in 1987 and have long been based in the mountainous desert well south of Riyadh, from where they can target Iran. Today is the first time they have been seen in public.
http://www.washingtoninstitute.org/policy-analysis/view/saudi-arabias-mi...
Take note of who was there:
Top guests included King Hamad of Bahrain and Sheikh Muhammad bin Zayed, the crown prince of Abu Dhabi, the lead emirate of the UAE. Also present was Pakistani army chief Gen. Raheel Sharif, who sat next to Prince Mitab, the minister of the Saudi National Guard and senior son of the king.
Why would they ever need to use those things?
Their good buddies in Israel would be happy to do that for them.
one of those nukes is a 20 yr old liquid fuel relic
hope they have been on top of O ring replacements
It's coming. Hedge accordingly. And I don't mean anything on that chart, either.
cash in the backyard?
I'm now short the ES contract for June from 1875.25 times four; $200 a point. with todays date. Let's see what happens next.
Well off the lows for the devade. Well off... You need to get with the program
once hyperinflation kicks in they'll have more cash than they can handle.
but......
unintended consiquences by the FED
"The market is not rigged...the market is not rigged..."
DavidC
as seen on a Market Rigger BillBoard
Corporate Cash being held WHERE?
Can't bring IT home, so bonds we go!
Expect CapEx to accelerate going forward? WTF are they smoking? As long as Zirp is in place and until the over capacity issues are addressed, companies will continue to reward shareholders with buy backs and dividends over spending on CapEx.
We all know that the American consumer just can't git enough of that innovative stuff. Just give them bigger wallets if they need to carry more cards.
Of course by "American consumer" I do mean the global consumer of prime American export goods like debt, litigation, pre-detonated explosives, and Halliburton contractors (who require concessionaires, translators, and so forth to function properly in the restoration and ongoing maintenance of batch-obsoleted community infrastructure deigned for upgrade by remote-guided airborne flag implacement devices).
I wonder if "capex" includes devices intended to provide revenue streams or some other bogus scumduggery. These fuckers wouldn't tell a lie that was easily uncovered.
(batch-obsoleted community infrastructure deigned for upgrade by remote-guided airborne flag implacement devices).
Bravo!!! That madame, is a work of art.
Agreed, that is one heluva piece of wordsmithing there.
Yeah, that, "Expect CapEx to accelerate going forward" part is what stopped me short....makes no sense at all. There's not a snowball's chance in Hell that companies are going to expand production. All the borrowed money is for something else entirely.
You win the thread.
Precisely why you won't ever see the downward pressure on yields relent. From corporate debt to government debt, they simply cannot allow yields to return to longterm averages....
"won't ever"... nope, nothing on this planet lasts forever. So at some point, but it could be years away, this shit house will implode and it will be something to behold.
Sadly, 'They' were unable to stop the 2007-2009 decline amongst others, 'They', the PINKO COMMIES, will eventually be overrun by Mr. Market. Mark by words....
Why should they show it when the main idea is to keep the party going.
Anybody else watching the 10 year over the last half hour? Interesting.
"Anybody else watching the 10 year over the last half hour? Interesting."
If that sucker prints with a 25 handle...run for the hills.
Of course DB's 50 trillion euro derivative exposure to the likes of this are nothing to worry about.
Well sure, if I were to max out my HELOC and all my credit cards' cash advances, I'd be rolling cash myself. Actually, it was in 2003 that I had my moment of clarity regarding the impending collapse of our debt-based scheme. I refinanced my little starter home, bought in 1996 for $49,500. My credit union, normally quite cautious, appraised it at $135,000 and offered to refi me up to that level. They suggested I take a vacation, or buy a boat or a new car. I laughed and asked if I'd have to pay it back. They didn't laugh and said, "Yes." So I said, "Oh, well, I'll stick with what's left of the $49,500 then. Thanks." They acted like I was the stupidest guy they'd seen all day. When I sold that house in 2009, I got $139,000, paid off every penny of debt remaining and put half down on a $200,000 house.
But yeah, those years in between I did not have $100,000 in cash on my balance sheet. Nor a boat. Which made the Unfortunate Boating Incident a little less convenient, but far from unmanageable.
Please corporations get fucking bailouts, unfortunately people do not.
Anyone see the irony yet?
Roll the mother fucking guillotines, nothing changes otherwise.
Hey corporations are people too. The supreme court said so.
Right you are Doc. As a person in the U.S. when I commit a crime they lock me up. So now that corporations are people we can lock them up as well. I assume that the entire corporation (both here and abroad) is the peson so all of the entities should be locked up. Hell, let's start with all of the corporations who have committed murder over the last few decades and give them the death penalty. That should take care of the MIC, most fortune 500 companies, consulting firms, corporate shells, technology companies, ag businesses (think United Fruit / Chiquita, Dole, et al). Now do we do letlhal injection, gas or guillotines?
I say guillotines. At least then we could feed the "unwashed masses" a wicked blood pudding...
With 7+ billion mouths to feed, we need to be efficient about all this...
interesting times indeed...
Rest assured that some sociopathic .gov creep is making plans to take care of those 7+ billion... In an efficient manner indeed.
In a time where the courts regard a corporation as a person, it wouldn't surprise anyone. We've gone so far off the reservation just to amend their wicked beliefs into their abnormal reality, it's not even funny anymore. We're all suffering the consequences of their wickedness and I don't mean that in any religious context. There's straight and then there's everything else. They haven't been thinking straight for decades.
Come to think of it I think it would be poetic if we used the products of each company for the execution methodology. Monsanto executives have to overdose on Roundup. Exxon executives will drown in Texas lite and sweet. Chiquita executives will have bananas stuffed in every orifice. I am sure we can make a game show out of it with the top Twitter suggestion guiding the action.
poetic if we used the products of each company for the execution...
Your suggestion is not the first time such a "solution" has been offered. The Anabaptists remind me of "native" Ukranians of today. (If there is such a thing.)
Anabaptist: "A movement that repudiated ecclesiastical control of individuals through infant baptism and sacramentalism, and strived to attain radical discipleship to Christ by separation from worldly enticements. ANA (Greek, “again”) + Baptists made a public statement through the act of rebaptizing - theological (to believers) and political (to authorities). Their illegal rebaptisms were perceived by the government, in a similar manner to draft card burning in the turbulent 1960s. Anabaptists were routinely hunted by Täufenjager (baptist hunters) and executed through drownings (mockingly called the third baptism) and as human torches. Few of the original leaders escaped martyrdom."...
"The dual hand of church and state released its severest form of tyranny on the Anabaptists. The Rhine Valley during the mid 1500's witnessed nightly torches of burning saints. They were mocked and scorned by angry crowds as they were led to their executions. It is ironic that the very entity that suffered the initial pain of affliction in the Roman arena now became the Afflicter. Doubly ironic is that many of the Reformers who enjoyed their newly gained freedom from the Roman Catholic Church, likewise chose to be the new Afflicters. The wanton slaughter of Anabaptists was severe, vitriolic, and offered as entertainment in some locations; but still they grew in number, and became even more resolute in their convictions and activities. European nobility pronounced death to all Anabaptists at the Diet of Speyer in 1529, and within a few years most of the original leaders met with violent deaths, but still the movement grew and increased in strength. Täufenjager (baptist hunters) were special groups that systematically and persistently tracked and arrested these intractable saints. History has witnessed few movements whose participants were as inveterate as those of Anabaptism."
---http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDsQ...
just observing
Off topic: Your comment reminds me of how much I want to smash Jack Welch's smug face with a brick!
"Hey corporations are people too. The supreme court said so."
Correction Dr., corporations are persons. Most legal defs. of person exclude people. Its all fictional persons.
The problem is most people think they are persons and all the bull sh.t laws pertain to them. It is called brainwashing. Changing the meaning of words slowly to indoctrinate the sheeple into accepting unlawful concepts.
Under the US Constitution only people have unalienable rights, not corps. nor government. Government regulates commerce. Gov. can grant privileges to corporations. Elections are supposed to be conducted for the voice of the people to be heard, not corporations. Its a racket, aka conspiracy, aka sedition by felony treason.
Just my novice opinion from examining law.
At my old company, they get their cheap debt from JP Morgan. They have been buying up companies on the cheap left and right during the QE4EVA credit card shopping spree. Makes the balance sheet look strong!
That is, until, interest rates rise. Suddenly, the "M&A is the new R&D" and corporate buybacks don't look so good anymore.
"That is, until, interest rates rise."- Please, there is no market for true price discovery...
The oligarchs will kill all fiat before interests rates rise, this has been the plan for quite some time.
It'll be a long time yet before interest rates rise. The future will bring with it moar fear, and moar fear will bring moar flight to "safety". In a sane market, confidence would be destroyed and rates would go up, but not in the insane world in which we find ourselves....rates will stay down for a good while yet.
RE
Agreed. The paralells to Japan are uncanny, right down to the wage deflation for workers (despite asset, real estate, and food inflation).
This might go another 10+ years. Especially if we go to war.
And rates could rise much faster than Mr. Yellen would want them to. Everybody keeps staring at his mouth when he talks (eeehm... maybe.... eeehhhm.... 6 months after 2015 bla bla bla)
But what if nobody WANTS to buy treasuries anymore? The rates will spike. Just because it didn't happen to the US before doesn't mean it wont happen.
Just check out Eurozone periphery bonds 2010 and 2011, Mr. Yellen: Do you think your buddy Draghi did that on purpose?
Where is the fuel for when the economy some day wants to take off... Its constrained by high debt loads due to the FED keeping interest rates way too low for too long. If rates were up at 4 to 6% then corporations would not be borrowing as much and would have plenty of cash on hand. Also, money would be directed toward only productive uses and banks and other financial investors would put money to use on the domestic economy rather then try and make money on arbitrage plays and funding international banks and such... Low interest rates should only be used for a brief time...year or two at most...after the purge of a recession so as not be "push on a string"... Its the direction of rates that matters and that bit of stimulus can only last so long...
Rates are not going much higher for a long, long time. The markets are not rigged. All hail, Mr. Yellen.
I keep sending out the nail guns and shitgums...need updated banker death report.
Its early but...time for a bong hit.
WTF? "As long as rates are low and keep declining, this record debt hoard is not a big issue". Keep declining to where? Rates are already at rock bottom prices.
+1
Someone actually disagrees with you and thinks rates could go lower? Wow.
Record corporate cash means we printed trillions and pumped it into the stockmarket so they could all initiate stock buy-backs to prop up their balance sheet and show profit and growth for the last 3 years. The rest went into major stockholders pockets, surprise, suprise. I'll say it again. They printed tons of money and did nothing, now we're broke 5 years later with the same economic problems, NOTHING has been fixed.
Exactly why stock buybacks are an incredible sham. Unless you sell the next day, the "giving profits back to investors" mantra is bullshit. When the market takes its inevitable messy wet shit, all of those "profits" will instantly disappear.
IBM will be bought for pennies! Probably by Oracle...
Screw the charts. Give us some hot female anchors we'd like to bang....NILFs News I'd Like to Fuck
Need to get the WW3 eraser out. Of course the peons will be getting hand-delivered mortgage and credit card bills.
I look forward to the rising interest rates. If a broken window helps the economy, think of how much a broken economy will help the economy!
CNBC still does financial news? i thought they just did infomercials for such revolutionary products like the Shake Weight.
If you're rich, they have hot escorts for your private plane rides. There are federal reserve groupies there too.
The CIA and the Media http://stateofthenation2012.com/?m=201404
Looks like every other ponzi scheme chart to me. This chart should be labled, ZIRP induced Euphoria Chart...It's no wonder their having sunshine meetings?
I wonder if: Say a company has $10 billion of earnings stashed in Europe and they don't want to bring it into the US becasue of the high tax bill. So, they borrow $10 billion in the US at very low interest rates. Then they service the debt with the $10 billion in stashed earnings in Europe which debt payments offset earnings in the US thus reducing their stateside tax bill. Voila tout! They have essentially gotten their $10 billion into the US without paying the confiscatory tax!
If this analysis is wrong, pease let me know.
then these arseholes use every legal and tax advantage as well as going offshore that they can... rape and pillage! the American Way!
these are the job creators mind you!
JOBS:
wash my yacht
servant
landscaper
Why else, the KABILLION CAYMAN ISLANDS ACCOUNTS UNDER A VAGUE NAME....
....and elsewhere.....
In view of the liquidity trap and
monetary and fiscal largesse all
at the expense of the middle class
this is perfectly logical.
Mr. Spock would say this:
There are two possibilities.
Our "leaders" have turned logic
upside down.
Our "leaders" are really "raiders"
not serving the public purpose.
In A Nutshell, All This Is About
Going From A Nation In Debt
Or Prison To One That's
Either Not In Debt Or Else
Uses Its Debt To Worthwhile
Ends, And Enables People,
Instead Of Imprisoning Them.
yeah, but they don't ever plan on paying their debts...it'll all be shoved onto the public side of the fence for generation and generation to slave away at.
And in the short term: Bail-Ins, bitchez...
Get outta the banking and credit system and go Gault.
Ag is on sale, YET AGAIN, today! I know I'll be adding to the stack.
MAD FUCKING MAX / BOOK OF FUCKING ELI
take your pick
I personally'd do with Mila Kunis
Mila Kunis for Fed Chair!
Maybe not:
http://www.justjared.com/photo-gallery/2774902/mila-kunis-ashton-kutcher...
Yikes, looks like a girl in my art history class
And people say you can't borrow your way to prosperity....
Frankly, my boy, it's all play-pretend.
If you're at the top, it'd be wise to loosen the leash if you value your head. It's common sense.
Debt forgiveness is inevitable, or face social upheaval. Never violate a man's sense of sufficiency lest you want to get bitten.
"Debt forgiveness is inevitable, or face social upheaval."
And there it is!
The System ends up breaking regardless. There's no more blood, er, oil, in the rock. The grow-or-die system's options are pretty clear at this point.
In a land of debt and leverage, asset values including real estate, Corporate stocks and bonds are only as valuable as the interest rate that supports it.
oh those ratios always just distort reality /sarc
Even a dumb 'True American Capitalist' like me knew this years ago. Doesn't take much investigating. Still, Card-carrying PINKO COMMIES (e.g. MSM, Corp. Lobbyists, Politicians, and Bankers, et. al.) are desperate to get things going. Sadly, their corrupt system is coming to an end and there are very few people who buy into the bullshit (with the exception of equity bulltards and those who benefit from the maintenance of the 'Status Quo').
Hurling around lables doesn't do anything but distract. Don't care what "perfect" system you wish to run things, as long as it's requiring growth to work it's going to fail (growth is dead, that's the message- has to do with the premise of growth not what ideology is behind that premise [the premise itself is flawed]).
The premise is their ideology - in this case communism is not really hurling labels.
Sure it is. HIstory states that ideology has little to do with the collapse of empires. Read: http://www.rexresearch.com/glubb/glubb-empire.pdf
I've spent enough years on this planet to have gotten the point that TPTB could give a shit what ideology is used as long as THEY have the power. The "ideloogical" shit is part of their divide and conquer game... Helps pad military budgets: "get those commies"- never mind that BAD SYSTEMS FAIL and that as a bad system communism could NEVER "take over the world."
Sometimes history and logic is lost on people...
People are as people 'do'. Be a man of non-action...
Huh?
You see, it's the great trick by the Statists, to get you to react. Most will knee-jerk and leap at something; TPTB know this.
And sometimes people aren't as smart as they think they are. Human hubris...
For those who really have no ideology you are correct - I think they are called 'psychopaths.'
Most, including the elitist wankers, do have some form of ideology that they follow - all the way over the cliff.
A 'perfect' system is 'non systematic'. It is self-sustaining and requires no 'growth'...Like the sound of one hand clapping. Get it?
I could not tell you what "sustainable" is. But, for sure I can state where "growth" leads.
Agreed that labels do little but identify something. I am merely pointing out the 'enemy'....
Well then, it should be pretty clear that the "it's on the sidelines" folks have been correct all along! </sarc>
The digits are rapidly filling the bottomless-pit holes in banks' balance sheets.
This is past "circus" and is now clearly a "VIRTUAL circus" (we don't even have the real thing anymore).
They can borrow to pay off all their debt.
And for each dollar borrowed that "creates" NINE more. How could we ever be out of money? WINNING! </sarc>
Lucy - I'm home!
Actually in some ways this is good new. Rates will eventually rise and bond prices will tank so that the effective rate stays competitive. This would allow issuing companies to by the debt back for less than they issued it for. If rates really soared you could see heavy discounts. So if a business is healthy, like say Apple, they could retire their $17B offering for considerably less.
This is not your grandfather's cycle...
"So if a business is healthy, like say Apple, they could retire their $17B offering for considerably less."
Perhaps. But consider that their sales will likely have collapsed due to the fact that consumers will be hammered by those rising interest rates (less disposible income).
I hate when graphs don't start at zero at the bottom.
Yep. Zero gives you relative proportions.
You must really, really hate log-scale graphs, then.
Probably explains why so many don't understand log-scale, using equal % changes for each unit distance, and why my scatterplots get so many -1's because they are all A vs B with both in log-scale, so no zero value can ever be there.
http://flic.kr/p/f5bHkJ
Very pretty! ;-)
Miffed;-)
Zero Hedge! I know this will NOT be popular. But try to get past you knee jerk reaction. Give this some thought!
Fed ZIRP/TARP/QE policy has put 1-3 $TRILLION into corporate and financial coffers. Low pay to US workers and foreign workers has put some 6-9 $Trillion additional money into the international banking coffers.
Now, this money is NOT earned! It certainly does not represent MERIT pay. It is only the perversity of the manipulated and rigged international financial system and trade deals that have resulted in these MASSIVE wealth accumulations.
So how do we EFFICIENTLY drain this swamp? How do pry this wealth away from these global thieves and oligarchs and fight against all their underhanded and clever tricks?
INFLATION. INFLATION. INFLATION.
Inflation is the best means to offset the inequities we see here. And yes, it hurts the little guy too. But it is the only way.
I know! Let the down arrows commence!
When push comes to shove I think you are correct. At some point, governments will grab bankers by the balls, hang em upside down and extract what they need from their pockets (through inflation or otherwise, at gun point, you name it)...
Currently we are in the "fattening the pigs prior to slaughter" phase...
This is not possible. In fascist countries (like the US), the banks ARE the government. They go down, we all go down. Back in 2008 they held our 401k's hostage in lieu of TARP, and we buckled like the nation of pansies we are. Until Americans are ready to sacrifice their retirement and their lives for a better future for our kids, nothing will change. Are you seriously holding out hope for government intervention? If so, there is a website for you: www.huffpost.com.
The bankers ARE the government !!!
Yes.
Understand! The correction is not an OPTION, it is the INEVITABLE.
Correction must occur and it will either be by INFLATION, CONFISCATION, TAXATION or REVOLUTION.
It's not a secret that the wealthy do NOT want deflation, inflation is their chosen means.
Are you saying that those who hold the lions share of financial wealth WANT inflation?
If so, you need to think this through.
If you had a $trillion dollars yourself in the bank and financial institutions, would YOU then want an inflation rate of 10-15% taking away 10-15% of your Trillion dollars wealth year by year? NO, you would not.
That is why inflation is the needed cure.
Not sure which way you're leaning on this, so I'll just toss out more of my "observations" (using your response as taking points).
"Are you saying that those who hold the lions share of financial wealth WANT inflation?"
I'm not guessing. I'm reciting history.
Most "wealthy" have assets, and deflation removes the value of those assets. Consider that the CBs (esp Fed) have been doing all they can to keep real estate prices up (which is inflation)- if they allowed them to drop then their books would wipte out a shit load of value.
"If you had a $trillion dollars yourself in the bank and financial institutions, would YOU then want an inflation rate of 10-15% taking away 10-15% of your Trillion dollars wealth year by year? NO, you would not."
Yes, why would I have that much in the bank? Again, the "wealthy" became wealthy not by "saving" but by prudently investing in wealth-generating assets.
"Inflation" is the ability to dispatch a big number with one that's made bigger. Of course, it does nothing to rectify the underlying economic problems, but it does make the books look better!
Don't be silly: they get those trillions from freshly printed dollars.
They acquire for nothing. Inflation does them the least harm and starves the masses, putting them to death or into debt to those with trillions.
How about DEBT FORGIVENESS (private individual debt only) along the lines of that proposed by economist Steve Keen? Simple version: issue (let's say) $500,000 to EACH individual American citizen, regardless of need or debt. Those who have any debt MUST pay off that debt immediately, then they keep the balance. If you have NO debt, you keep the entire $500,000 tax-free. (Also, accompany it with a statute declaring that NO home (primary residednce) may ever be seized for lack of payments or taxes - only a LIEN may be attached, with NO levy until the owner dies.) Then re-enact Glass-Steagall AND outlaw any U.S. central bank.
Of course this will cause MASSIVE devaluation of the dollar, but what other option is there?
Someone else made the statement that it's pretty much the only course, debt foregiveness/debt jubilee. I agree 100% that this will be the outcome.
A "problem" trying to manage all of this in some sensical way is that the result, not matter what decisions we apply, is NOT going to end up looking anything resembling sensible, not as we have heretofore understood "sensible" to be. There will be no resurection of the system; therefore, basing decisions ON the system, using its metrics and mechanisms, will only be a practice in futility (and likely give the reigning powers a little more life).
Debt forgiveness may work but it MUST be universal. You have a mortgage of any size on an American primary residence, other than private loans, cut 30% right off the top and re-amortize all the loans. It would probably take a revolution and elimination of the Fed to make that happen.
Book 'em Danno!!!
Does anyone have a link to a similar graph going back more than fifteen years?
I, for one, would be interested.
Watson.
What are those two brown lines on the graph? Skidmarks?
Carrington Event. NASA video explains how we were 2 days away from a world wide emergency that would have 100 nuclear plants melting down….in 2012. They say the one 2 years ago could have been even bigger than the Carrington Event. Fortunately it missed the earth but nailed Stereo A sun observer satellite
Nuke Pro has been promoting the idea that we have to harden our electrical grid, or risk the annihilation of the human species. Yes, it really is that bad. And get rid of nuke.
http://nukeprofessional.blogspot.com/2014/04/nasa-explains-how-we-missed-100-nuke.html
The END is never a good outcome for life. Eventually the earth's cycles will plow us all under- little that can be done about that.
We can think in terms of the imortal, but our ability is and always be mortal. This divide provides quit an entrance point for human hubris...
MOAR LIES from the MSM.
I have a vague recollection of someone once telling me that Assets minus Liabilities=Equity, if that's any help.
that chart looks like Mt Everest
sad about them sherpas
some great hearts died
doing what they do ..
Parked overseas, tax free.
Perhaps in a PHC in the Netherlands?
APB 23.
Hey ZH, why don't you post a story on APB 23?
It may require some reading and intelligence, but you might pull it off.
google it, idiots.
Janet Cheer Yellin.
I wonder what Q2 excuse will be?
Good thing they stopped with the 1929 chart comparsion
'Those corporations never built that debt!' - The Kenyan
Fucking childish Party Pussy shit. Gets old...
For u to cheer u up: https://www.youtube.com/watch?v=bQu2SVFF-cU
You are right and wrong ... the Parties are identical when they get to DC. Bush taped Bernake, Obama Yellen ... can it get worse for the nation than that? GOP spends money on WarCrap, Dems spend money on everything else, and with the way the world is headed, I vote for WarCrap over Welfare
oh ho hoe-ing, it is 'american' to spend on much war-ring!