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We Didn't "Financially Engineer" Our Way Out Of The Great Depression, We Won A World War
Excerpted from Artemis Capital Management letter to investors,
The arms race of devaluation is not free and has come at the cost of massive global debt expansion. There is no precedent in financial history for a robust economic recovery absent either debt reduction or rampant inflation. We never deleveraged, in fact we just doubled down. According to a recent McKinsey study the world has reached $200 trillion of debt in 2014 (286% of global GDP), which is a staggering 40% increase from 2007 levels (+$57 trillion). In China, debt has grown four times faster than GDP since 2007, and half of that debt is linked to their property market. The world has simply shifted private debt to the public balance sheet.
The private risk transfer to the public balance sheet can also be seen in the evolution of credit default swap pricing since 2007. Notice the sharp divergence between global sovereign CDS (red) and financial corporate CDS (blue) starting in 2013. The next major global crash will likely be driven by unhealthy sovereign credit rather than corporate credit. The next Lehman moment will be the financial collapse of a major developed country instead of a bank.
There are those who point to aggressive central banking of the late-1930s as the model for de-leveraging post-depression but this argument is highly flawed.
We didn’t financially engineer our way out of the Great Depression - we won a World War.
It’s extremely helpful in the de-leveraging process if you are the only capitalist industrial power left in the world untouched by utter and complete destruction. De-leveraging from the Great Depression had as much to do with the blood, sweat, and tears of American soldiers, the development of nuclear weapons, and the fact we were an ocean removed from the battlefield on both sides, as anything related to fiscal and monetary policy from the era.
I don’t think some investors are being radically honest when they omit this brutal truth in their analysis of late-1930s as model to argue for more quantitative easing. More quantitative easing is a great thing if you run a large risk parity fund but it will not help the American middle class.
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US debt is $210 trillion per Kotlikoff. Or over $1,720,000 per taxpayer
Economist Tells Congress: U.S. May Be in ‘Worse Fiscal Shape’ Than GreeceThe U.S. has a $210 trillion “fiscal gap” and “may well be in worse fiscal shape than any developed country, including Greece,” Boston University economist Laurence Kotlikoff told members of the Senate Budget Committee in written and oral testimony on Feb. 25.
“The first point I want to get across is that our nation is broke,” Kotlikoff testified. “Our nation’s broke, and it’s not broke in 75 years or 50 years or 25 years or 10 years. It’s broke today.
"Indeed, it may well be in worse fiscal shape than any developed country, including Greece," he said.
http://cnsnews.com/news/article/barbara-hollingsworth/economist-tells-co...
We won't win the next one. That's for sure. With our huge debt levels, our 51% of the population living off of the .gov, and the Libertarian right refusing to buy into this crap anymore -- if .gov attempts to open up a front in Russia -- most definitely one would open up back home as well.
I think it's more acurate to say.........
We Didn't "Financially Engineer" Our Way Out of The Great Depression ... We Blew Up Every Other Factory On The Planet
It kind of paints the B-29 in a new perspective, doesn't it?
Who needs helicopter money when you can just bomb the industry of your economic rivals.
That's QE4
"We won't win the next one."
If "we" don't, it won't supprise me if "we" simply go MAD.
Go?
I'm talking full retard: if "we" can't control it,"we" end it:
http://media.photobucket.com/user/reallyreallyhothotyou/media/nuclear-bo...[term]=nuclear%20holocaust&filters[primary]=images&filters[secondary]=videos&sort=1&o=4
I think that already happened. When "we" started backing the "nice terrorists".
Pretty much what the author said, just in different words.
And we didn't win the war either. We did invest into Germany prior to WW2. It was #1 investment target for 5 biggest US corporations in early to mid 30's. Some conglomerate (like Coca Cola) kept supplying both sides all through the war. Read up the history of "Fanta" - a fascinating tale. The Fed engineered the Great Depression and then we engineered Pearl Harbour to get in on the action before Allies had a chance to carve up Europe. And Russians won the war. The nukes were over budget and behind schedule - designed to level Berlin, but completed only after the Russian flag was already placed on top of Reichstag. So to make a statement and put fear into Russians, we dropped them anyway on an island with no Navy, air force, or oil left left to speak of, because they were a mighty threat and lives had to be saved.
While not condoning the fact that we 'split the atom on some folks', taking Japan was not going to be some easy operation against a foe with no navy, airforce,etc. After the brutal campaigns on Bataan, Corrigedor, etc I think the US military was probably correct in assuming the price of a Japan invasion = a shitload of dead american soldiers.
The Japanese tried to surrender multiple times before the bomb was dropped and their surrender was not accepted. Read a book not forced on you in government schools.
What book?
A history book rewritten by the Japanese maybe.
The Japanese tried to surrender multiple times before the bomb was dropped and their surrender was not accepted. Read a book not forced on you in government schools.
Bigwilly, what book?
Second time is still wrong.
- Ned
Exactly....
"What Book" would that be ?
How about reading up on "Unit 731".....
Or perhaps "Nanking"......
Just for a few starters......
Didn't get any of that in my "American Schooling"......
The Japanese made Hitler look good in their "Unit 731" activities....
They Waged Horrible War and it was Waged right back at them......
Just dues in the End.....
And the Japanese were Damn Lucky after the War.....
One might "Read a Book" on Carthage and Scipio......
No Sympathy or Apologies.......
An island with no navy and no airforce would've surrendered without an invasion, but then we would've wasted 2 perfectly good nukes, years of research and billions of dollars in today's money. Dropping a few megatons on an uninhabited area to make a statement like Russians did in 1961 just ain't fun. Better have a smaller kaboom reinforced by a couple thousand human screams. More bang for the buck.
/sarc
Yea, we need to stop beating ourselves up as if we are in any way "bad" here for fighting a war. It's utterly retarded. We nuked em and we nuked em good, I don't really care because they are not us.
But, but, but...that's not what they told me in 'Murican history class...!!!
+1!
That's not to say we didn't try to engineer a way out. But it ended up making things much worse.
http://newsroom.ucla.edu/releases/FDR-s-Policies-Prolonged-Depression-5409
Unfuckingbelieveable how history repeats itself.
https://thinkpatriot.wordpress.com/2015/05/29/straight-from-the-horses-ass/
Lousy thinking in history, a refusal to discinpline ourselves, you have to do engineering of political systems.
OT: if I was a US Libertarian, I'd resent this "right libertarian" vs "left libertarian" thing
Liberty, Equality, Fraternity: the three principles of ideology
sure, "Equality" is seen as "Left" and "Fraternity" is seen as "Right"... in most of the world
Absolutely. If you lightly hit either a left-or-right leaning Libertarian just below their kneecap, their leg jerks and they spout the same ridiculous ideology about how dope should be legal and all the first grade girls in town have a right to prostitute themselves to pay for their drug habits...
Unfortunately, or fortunately enough, depending on your willingness to seek out and embrace a cogent intellectual level, with reality being as infnitely complex as it is, the one-size-fits-all ideology of Libertarian patriots is just as bad as the ideology of the do-it-for-the-children progressive crooners.
Ideology is something that gets blown out the ass after a bad meal of flat-noodled over-confidence.
not long ago there was a resident us libertarian group here that would perhaps not agree with the terminology but agree with the principles
your answer is conservative to the core (request for a Brotherhood), usually a one-size-fits-all or else...
the trick would be to shape a human world where every and each would get it's preferred method or combination of it
your denigration though of ideology as something to even recognize or treat seriously is cultural, though, something that originated in England and spreads through the English language (where it's not born from eastern nihilism)
Equality of OUTCOME is what the left wants - Most conservatives don't have a problem with equality of opportunity - at least I don't.
"most definitely one would open up back home as well."
That's what all of the DHS, USPS, USDA, and other .gov ammunition purchases are for.
1.6 billion pistol rounds ain't going to keep us in line.
It will if the public can no longer purchase rifle rounds.
"Military prisoners of war and missing Overmans includes in the total of 5,318,000 war dead 2,008,000 men that are listed as missing in action or unaccounted for after the war and 459,000 prisoners of war who died in captivity."
Won?
Going to suck being a banker....once people figure out they have been ripped off... Kind of like being a Nazis sympathizers after WWII....great while it lasted...till they shaved your head or hanged you
The "people" haven't figured out the bankers ran WWI and WWII yet, so what makes you think that a decidedly less free and less informed population will figure it out this time?
To Krugman Leftists, who cannot do basic arithmetic, here is what they are calculating:
$210,000,000,000,000 = 0, and therefore no worries!
If you ignore debt, it goes away: the people to whom you owe it eventually die. Accounts reset to zero.
The Magic of Accounting!
$210,000,000,000,000 = 0
indeed , let's say Assad regime in Syria owes somebody lots of money. Maybe russia will eventually collect what is owed to it by Assad but everybody else - good luck going to Syria and collecting.
Lots of claims wall street has against many sovereigns is just claims,
actually going and collecting on them is a completely different matter.
Syria can default on any nation that ran a fiscal and military policy against it, they just have to win their 'civil' war.
having not seen how Greece defauled for years my bet is the governments of the world will continue hanging on the ropes of debt for decades to come without ever defaulting
I subscribe 100% (is that the correct way to say that?) to the title of this article
Dr. Krugman is another one of those idiots that does not understand that winning a world war while everybody else had it's industries smashed...
... is the true reason why the US had such a good time after the WWII. a good time that for political reasons had to be extended, then nobody will ever thank you for the bitter truth
meanwhile, producing weapons is the equivalent of smashing windows... twice. you ought to do it when you must, not because it's good biz forever
"The next Lehman moment will be the financial collapse of a major developed country instead of a bank."
Still waiting..., any minute now...,
The fact is they are all in on it so they can keep this charade going a lot longer than we can imagine.
Its settled then: we'll fight and win another world war.
I tend to doubt we'll win the next round.
Because God.
Because resources and fiat currency and our government is full of shit.
https://www.youtube.com/watch?v=m50p-XScreM
We didn't start the fire;
its been burning since the world's been turning;
this story is bull....we didnt deleverage in the usa. we never have paid off the war. we have rolled it for 70 years. so did we really win financially because we wernt attacked? we are paying for the war today and also the day we collapse.
Post WWII growth more than swamped our debt servicing requirements. That was the recovery.
'debt servicing'....right. we rolled the balance. people are idiots. one of the reasons it costs so much to live today is because we have a massive debt. the people in 1955 had a great deal but eventually the debt must be recognized and that is what is happening today. fiat is dead.
The private sector certainly deleveraged during WWII. Trade surpluses were not spent due to mandatory rationing, and the personal savings rate rose as high as 28%. By the end of the war, US households and businesses had clean balance sheets – a fact that’s often overlooked by the Krugmanites when they argue for more government spending as an end in itself.
Posted above, too.
http://newsroom.ucla.edu/releases/FDR-s-Policies-Prolonged-Depression-5409
'private sector surpluses' ....yes the workers did have unspent cash but the wages were not from productive 'production'. it was gov bonds to build shit that was blown up or toss off a ship at the end of the war. it is the ultimate broken window theory. this was great for the guys in 1950 but they didnt pay the fucking bonds off. all that unspent cash would have instantly been spent paying off the bonds. you cant have the gov create jobs or stimulate the economy.
we now have to either pay off the 'unspent cash/bonds' or deleverage on a global level. central bank fiat free money scam is over. we will deleverage now.....
also throw this in....europe was reduced to rubble. so was japan. where did they get the cash to buy our shit in the 1950's....? we gave then loans they never paid back. these loans were bonds that the 1950 taxpayer NEVER FUCKING PAID OFF. the rich had the gov finance the purchasing power of europe/japan. it was the ultimate welfare package.
we have that debt in the system today. that is why everything costs so much. money/fiat is debt. our money is worth nothing so everything costs a fortune now....
we will probably have a WW3 but it wont be financed this time. fiat is worthless. we will probably use up all our current arms and then everything stops or goes to hand to hand combat. we cant issue more qe when we have unlimited qe already.
Massive world-wide destruction and millions of lives lost in WWII left the US as the only standing manufacturer for the rebuilding demand that took a couple of decades.
With nukes the destuction will be many times worse. There might not be anyone left to rebuild as sites will be radioactive for over 100s of years.
The destruction to the environment with megaton nukes going off would be irreversible. Look at Fukushima and the Chernobyl disaster.
Back in WWII the US was a large industrial base country. Now China replaced the US as the industrial leader.
The plan calls for a worldwide population reduction to 500,000,000 levels. I haven't seen the whole plan as it applies to the coming war, just bits and pieces being leaked. But I would be willing to assume the plan calls for a fairly reasonable selective culling.
In that case, it's a good plan.
Nope, not gonna happen. Every single nuke power these days would set off the device in the upper atmosphere and cause an EMP that might take a bit longer (about a year to kill up to 75%) to kill everyone, but kill everyone it would. This would leave all infrastructure in place and intact.
Why do you think N. Korea and Iran only shoot their missles about 300 miles down range? You only have to get it that high to cause a civilization killing EMP.
The global economy is structurally breaking down and the status quo are doing their best to retain it.However, no amount of Keynsian lipstick is going to fix this swine.
Only war, destruction and death of the elite class, and the death of billions of innocent people will fix this swine.
It took two world wars in the 20th century to finish the global economy and status quo from the 19th century. Why? Because the status quo will fight to your and their death to maintain their power and wealth. My country was destroyed by evil men and women, and their enemies. My grandmother was raped and murdered in 1945 by the invading Red Army. She did nothing to deserve that.
Only after everything is broken, and a billion or more are dead, will there be a bright spot.
It's called the fucking Sun.
Yes, it's feeling very 1910-ish. Surprised more people aren't seeing it.
Billions? Maybe. But only after all of the pharmaceutical infrastructure has been broken.
"The next Lehman moment will be the financial collapse of a major developed country instead of a bank."
Here's looking at you Canada, and Prime Minister Poutine.
Please don't slander poutine like that.
We did more than win a world war.
We defaulted - wholesale abrogating the payment terms of contracts as a consequence of Executive Order 6102, and then devalued the dollar in 1933.
The Industrial and military position of the country following WWII, combined with its relative energy-rich resource base, simply meant no one was in a position to complain...particularly when they had also all defaulted.
Don't glorify War as a means to economic revival. It is not a means of economic revival. It is pure destruction.
Specifically the US benefited most from WWII because it committed LEAST to the destruction.
Stated another way, failing to destroy wealth when others do does not make one wealthier, but only apparently so by way of comparrison.
Bullshit article. That particular depression ended because Franklin Delano Roosevelt died, not because of the wealth destruction and death that was the "Good War".
Go far enough to the political left and you end up at the extreme end of the political right. There are no people on Earth who crave both peace and the power to rule.
Which tells you that the idea of political "left" and "right" may be just a bit lacking in its descriptive power.
Next "big one" could be another Civil War. Just saying....
War is the health of the state
Where's Russia? Oh, that's right, they already took their hit.
They had their revolution and their military stood down not taking sides until it was politically settled. Don't for a minute expect that courtesy from the USA military. They'll shoot us on sight trying to keep their MIC revolving door retirements.
But I thought those sanctions from the 'wealthy' nations were going to crush Russia?
Russian Debt to GDP is about 33%, with the western 'rich' nations hoping it'll hit 80-90% from the sanctions and Ruble devaluation.
About the USA Debt to GDP. Bet that 2.7 trillion they stole from Grandma and Gramps patriotically paying their FICA taxes for 50 years isn't included. (and they're still robbing it)
And who won the war? Take a look at the fatalities between the victors. The Russians waited four - five years fighting the Nazis until the Allies opened up a second and third front.
Looking at the fascist West these days,,, Sadly it was all in vain.
Sounds like you are advocating that all the Western Nations should default on their external debt, like Russia did in 1998.
But I have a feeling that you didn't mean that, and perhaps did not even know that the reason Russia's debt is so low is because they simply refused to pay the debts they already had.
Kind of hard to complain about others not paying for resources they bought (Gas, industrial equipment, etc), when Russia did the same in 1998.
We gotta install microwave ovens custom kitchen deliveries
We gotta move these refrigerators we gotta move these color T.V.'s.
Listen here
Now that ain't workin' that's the way to do it
You blow the shit outta the rest of the world, and then sell em' refrigerators and color T.V's.
Private central banks nationalizing national treasuries rather than national treasuries nationalizing private central banks.
give the Congress in '47-'48 credit for undoing much (not all) of FDR's Leviathan.
Max Keiser was banging on about world debt a couple days ago. Showing data that is truely epic in it's scale. World Debt has decoupled totally from GDP growth. No matter how many loans are made, how many assets are purchased, how much debt the world takes on, it can NOT spur economic growth. Wealth production is based on simple economics. Workers save surplus wages and bank them, banks lend this to productive businesses needing expansion capital. Banks pay interest to depositors, borrowers pay a slighly higher interest to banks. UTILITY for both depositor and borrower, with the capital put to use in plant, equipment and labor to produce real world wealth surplus. Wages to workers allow consumer spending to spur demand and surplus wages in savings fuel capitalism. It is all based on mutal benefit.
The financialized world is a toll booth world, Take, Take, Take. They produce no wealth, they only skim it to the 1%.
The whole system will never again work, till it is destroyed and remade on sound money, honest wages, and market interest rates. Plus banks as regulated utilites.
210 trillion . remember like 15 years ago when it all over the news about the debt being a fraction of this number now. What an Orwellian joke why not just make it 888 trillion and turn the 8's sideways its all a bad joke. One step closer to hitting rock bottom
210 trillion . remember like 15 years ago when it all over the news about the debt being a fraction of this number now. What an Orwellian joke why not just make it 888 trillion and turn the 8's sideways its all a bad joke. One step closer to hitting rock bottom
God knows how the war would have turned out if Hitler had not attacked his bankers in the City of London Corporation. That's a no-no. Attacking the Great Red Dragon was stupid. The only way to win against it is NOT to feed it. Don't do business with nor respect its agents. Let it dwindle back to a much smaller state, and it won't be such a nuisance in the world.
LET'S SHOW THESE COMPELLING HISTORIES, RIGHT UP TO THE PRESENT!
http://ShowRealHist.com/yTRIAL.html
The Federal Reserve Bank of San Francisco published a working paper this month, "Measuring the Natural Rate of Interest Redux," in which it introduced the potential for using both negative short-end rates coupled with another round of quantitative easing (QE) focused at the long end, as a response to the next recession.
http://www.frbsf.org/economic-research/files/wp2015-16.pdf
Thomas Laubach
Board of Governors of the Federal Reserve System
and
John C. Williams
Federal Reserve Bank of San Francisco
October 14, 2015
Abstract
Persistently low real interest rates have prompted the question whether low interest rates are here to stay. This essay assesses the empirical evidence regarding the natural rate of interest in the United States using the Laubach-Williams model. Since the start of the Great Recession, the estimated natural rate of interest fell sharply and shows no sign of recovering. These results are robust to alternative model specifications. If the natural rate remains low, future episodes of hitting the zero lower bound are likely to be frequent and long-lasting. In addition, uncertainty about the natural rate argues for policy approaches that are more robust to mismeasurement of natural rates.
"We" didn't defeat Hitler. "We" created him. The Soviets did all the real fighting and all the real dying. "We" showed up only after the hard work of wearing Nazi Germany down was done, and took all the credit.
Then, having eliminated most of the Jewish competition for top government and finance jobs we wanted for "our" sons, "we" helped ourselves to the Jewish gold that is sitting in Swiss banks to this day, enough to pay off Israel's entire national debt and set them up with a good-sized sovereign wealth fund. As a distraction, "we" gave the Jews a miserable Middle Eastern reservation to make it look like "we" hadn't sold Hitler all the supplies he needed for his war machine and his gas chambers, leaving it to the Arabs to finish his work.
Now "we" are dithering while Putin's Russia does the hard work of removing the menace to not just the Syrian people but the entire world that is ISIS, the creation of "our" friends the House of Saud.
Of course "we" never answered in any meaningful way for "our" role in creating Hitler. "We'll" never answer for our role in creating ISIS.
Central banking is a lie built on the ashes of World War, though I suspect this time no ones getting out of here alive after the next one...not even the so-called elites they are king tut they just don't know it yet
No real hope for WWIII - in WWII we put a whole nation to work and sent millions off to war for almost 4 years! WWIII will be fought using high tech weapons built by a handful of workers and will barely last a few weeks.