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The "Growth Problem" Explained For Idiots And Federal Reserve Dummies
Over the past six years we have tried, in a countless number of ways, to explain to the "wise" economists, IMFers, World Bankers, Federal Reservers, talking heads and everyone else who would rather not listen, that which is glaringly obvious: the US (and global) economic growth will never recover and rebound and in fact will decline with every passing year for one simple reason - the US (and global) debt bubble is bigger than ever.
In fact, at 300% total debt/GDP it is bigger than the 275% hit during the Great Depression (we doubt we need to remind readers what global event ended that particular time in US history).
So, in hopes there is still some intelligent life left among the decision makers, and in hopes of liquidating the record debt overhang before it is too late and the US has to engage in another deadly, global war, here it is again:
1. Long wave economic cycles eventually all fail due to debt
2. Nominal GDP growth tracks credit growth
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More debt will fix that.
Pump it up Yellen, you stupid motherfucker!
http://www.dailymotion.com/video/xr22b_elvis-costello-pump-it-up_music
"Yellen, paging Ms. Yellen,.. Mr. Blankfein says it's 3:45 and the market is still going down..."
She's busy filling in Kevin Henry's pink slip.
Not....off....the....lows....
"Long wave economic cycles eventually all fail due to debt"
ZH is going to explain to the idiots that believe what ZH says is true, while the rest of us laugh. Sorry, ZH, all the previous cycles fail as the system is built to fail as hairless monkeys like the people that run ZH want a return (ie interest) which requires a debt/credit system. The system collapses and liquidates not because of too much debt but the inability of the system to expand exponentially to pay for the Jim Cramer ads on ZH.
These articles are a hoot. I can honestly see why the people that run ZH were let go.
...Aaaaaaand, here's the close,... It's at the lows of the day!
[The PPT was strangely absent...]
If we can print and drop money from a helicopter...oh shit someone thought of that already.
ZH has all the answer just remove the credit/debt from the system, oh no, let me see they want a freeze of the debt.... well, tell you what... you let me know what it sounds like when debt/credit is no longer being created to sustain the prior debt/credit. Look at that Laser Hair removal ad on ZH....
Damn rights, man! You tell 'em. The ONLY way to cure alcoholism is to drink more.
Therefore, the only way to cure a credit crisis paralyzing the system from too much debt is to print moar.
Fuckin' A, dude! Thanks for your Princeton Econ lesson.
Landofree it’s simple, declare bankruptcy, kill the federal reserve, allow private currencies backed by gold, pass full reserve banking laws. In 18 months this shit storm would be over.
People need to lose money now and then to re-learn why getting over-leveraged is stupid. The problem is not with fractional reserve in itself, the problem is just the attempts to artificially prop up a bank that has failed due to it, and the attempts to bribe the depositors into not worrying about it in the first place. Full reserve won't solve anything, so long as there is debt or margin, you're never truly at full reserve. Fractional reserve is fine so long as the customers are not looking the other way due to the FDIC and TBTF, as that will mean those who stretch it too far will actually lose money, and that means people will actually be worrying about it enough to probably not have it happen that often.
Land, your grasp of econ is truly amazing.... Sadly, it doesn't keep up with your reading comprension.
Whatsamatter- you lose a couple bucks in your Janus Index Fund today and can't cope?
That you claim to derive your conclusion based upon what you've read here is hysterical.
Go back to clicking the little ads- that's your contribution to the economy- or at least Tylers wallet.
Oh, and please supersize my order of fries for me- I'm feeling a tad richer today for some reason....
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Hmmmmmm. Who are you "Landotfree" or maybe better yet, what are you?
She doesn't go by Janet Yellen in those cirlcles. Signed Edward Quince
Her codename is probably Zirpa Quatro-Eva
Those graphs are actually the case for a full market recovery.
So if you see those graphs, and follow te logic, you now need to go long on the indexes.
I might just do that actually... I'll wait for another week and go long because weirdly, if their market actually turns, it will be a mean shortsqueeze
When the great depression hit, govt's couldn't print money. Now they can. Not saying this will solve anything or even make things better than the GD. Just saying this time will be different.
same but different. look to japan to see how this one plays out. a long slow decline. a depression by any other name. eventually though the yen will be worthless, and the japs can compete with chinese slave labor.
Here is how it will be different. In the last great depression there were plenty of goods to be had but no one had any money to buy them.
In this next great depression everyone will have plenty of money but you won't be able to buy anything with it.
We've pretty much copied Japan's playbook to a T. See Richard Koo's "The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession." Great book.
"When the great depression hit, govt's couldn't print money. Now they can. Not saying this will solve anything or even make things better than the GD. Just saying this time will be different."
It is never really different. Greenspan and Bernanke doubled down on 1920's policy and all they did was create a bigger credit bubble to burst.
The inflation/deflation cycle completes through deflation.
"It is never really different. Greenspan and Bernanke doubled down on 1920's policy and all they did was create a bigger credit bubble to burst.
The inflation/deflation cycle completes through deflation."
Period.
Actually it is the government that cannot print "money" now. That function belongs to a private bank that may or may not be interested in making things better or worse. It all depends on your POV.
When the great depression hit, govt's couldn't print money. Now they can. Not saying this will solve anything or even make things better than the GD. Just saying this time will be different.
Not true. In 1933 FDR got the US federal government to confiscate everyone's gold before devaluing the dollar some 40% - the equivalent of expanding the money supply by that amount.
It will re-set on its own once the bubble collapses. Debt will go away along with paper wealth and a new currency will be created. We have seen this in a number of countries. Those that hold to fiscal austerity survive while those that repeat the debt bubble collapse again about a decade later. Entitlements will also get re-set and it won't be pleasant for retiring boomers. The laws of economics will win out as they always have.
"Federal Reserve Dummies:"
Get that Dudley, Yellen, Williams, Evans and the rest of you PhD idiots?
Just Keynesian zombies, no original thoughts.
Couple of Stanford economists wrote a paper about this 15 years ago but apparently noone read it.
And that's nominal GDP. Real GDP per ShadowFacts shows we are already in a Depression, with other shoes to drop.
If you just look at the second chart and think back and ask, what was happening then, you will see housing and computer related businesses, were stimulated or coming online, are what held up the economy.
And now nothing is left except maintenance and repair.
I suggest watching Revolution on netflex
Krugman bought the entire print of that book.
Mr Market digging a hole
Please please finish on "low of the day"
? Warren Buffett
This debt will be resolved the old fashioned way - they'll inflate it away. Why do you think they're so anxious to reflate?
they've tried for 6 years ... King Dollar has other plans
They've tried to inflate debt with more debt. It can't possibly work.
You might think that is completely insane or stupid untill you realise that the debts and credit are going to different people. We the people get the debt and we the elite get the credit.
It will take a while until the pringint presses really get rolling. Wait for it. It is coming because that is the only cover these evil bastards have. They will print and blame the effects on all the usual suspects. (greedy capitalists, hoarders, profiteers, shopkeepers, kulaks......)
.
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If you view Debt as a measure of how well you are optimizing Assets, you will always increase it.
C'mon S&P! Break 1905 to the downside before the close!
You can do it! It's a long way to your 666 true self so get busy!
triple digits
wheeeeeeeeeeeeeeeeee!!!!
Fed is ENEMY of all Mankind, WAKE UP SHEEPLE!
Ya forgot "Status Quo Huggers".
Global reset anyone?
Here's a suggestion. Increase the percentage of currency in circulation with respect to debts. At the moment the UK is 3%, Europe is <1%. You obviously can't solve a debt problem with more debt.
Lets make 33% the legal minimum and pay unemployment benefits and pensions in physical cash.. This solves the debt problem completely. Use the reserve ratio to control bank lending to prevent hyperinflation. Oh look the influence of banks and bankers goes away.
The solutions to debt are simple.
either.
1. Repudiate it, and there are only 2 ways to do that. 1. Default. 2. inflate it away.
2. Pay it. Which means 50 years of deflation and 90% drop in everything.
that is kinda what they just figured out with the recent approval of the suggestion that cash be given directly to consumers.
the whole financial system is just an algo with manipulatable variables that can be changed at will to get the desired outcome.
Where does this cash you speak of come from? Oh right, more debt.
Ehm. nope. Cash can simply be printed, there's no requirement for a balancing debt.
There is however another benefit to cash over credit.
Cash, the real physical stuff, can pay multiple debts whereas credit (the bookeeping entry) can only pay a single debt before being extinguished, disappearing and therefore causing deflation. As money, cash and credit have entirely different properties.
Have we tried aTrillion Dollah Coin yet?
It is amazing that this isnt the number one fucking story on the stick-your-head-in-the-sand and ignore it media every single day. I mean there may be a tiny point about the composition of the debt with individuals having deleveraged a tiny bit. But at the end of the day, debt matters. Of course Cheney and others would say it doesnt and guys like obama just dont care. The are right. Right up until there is a call on debt and then they are massively wrong. It is knowing when the margin call will come that brings the dominos down that is the question. And of course the krugmans will say the fed can just buy it all. And they can for some time. Until someone says no. But the lack of focus on this issue is astounding.
This is an anti-Semitic article. Exponential growth on a limited planet is possible!
If the writer of this article really thinks that World War II ended the Great Depression, he should be reluctant in calling other people idiots. Last time I checked, wars primarily destroy. What really ended the Great Depression is the end of the New Deal and serious deregulation of the economy following World War II.
I agree with you but that's not the takeaway I got from the article. I think the point was that the last refuge of (failed) Keynesians is (usually) war.
But . . . Liesman sez the Fed balance sheet won't shrink at all for more than a year, and he's so smart most of his hair is gone (technically, his head qualifies as a geodesic dome)
For more than a year? The Fed balance sheet won't shrink EVER.
Then, how will they pay for the donuts in Eccles Building conference rooms?
Yellen, get that peddle to the metal bankster.
Largest debt bubble in modern history...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
debt saturation: when all disposable income is used up repaying *past* demand
money-lending for consumption = financial version of heroin dealing
Somewhere there must be a taxfree haven overflowing with printed trillion being hidden by the criminal wall street cartel