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Filed Under Exponential
By now everyone has seen this, as it has been posted on Zero Hedge about n+1 times. And if the haven't, they should.
They should also see this. We will shortly update where this chart will be by the 2012 election, somewhere around 120% of GDP.
And for those requesting it, here again is the log scale chart.
Source: NYT
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Luckily Government can vote itself an instant payrise by returning to the tax regime of the 1970's. To spell it out: higher taxes for the wealthy and for corporations.
"Well....I'm sorry, but we aren't able to extend you any more credit"
Find a bankster who does low doc mortgages. Plenty around.
Brilliant timing for WWIII.
6 Trillion to 14.4 or 17 trillion in debt in a decade?
Gold $250 to $1600 during the same decade. Silver $5 to $40. Hmmm.
We are on an unsustainable path and no leadership but the "status quo" government growth that got us here.
At some point, even with devalued future keynesian dollars, your credit or ability to pay the debt will stop the government.
And real austerity (and it is coming to America as the long term SS and entitlement numbers suggest, along with greater inflation) is gonna be a wake up call for those who think that the government can be everything to everyone who wants it. It can't.
When austerity (market collapse) comes to Amerika, it will be at the end of a police baton and a jack boot to the ass.
Aaagh, double post, just a fat finger on the keyboard. Mea culpa.
Excellent! All exponential curves reverse, so this will solve itself. Free money to everyone!
1971 Article: "Debt Limit Increase Urged"
Look at the prices in the grocery store ad on the same page. Somewhat ironic, no?
http://news.google.com/newspapers?id=Dx40AAAAIBAJ&sjid=AeEIAAAAIBAJ&pg=4...
Ah, simpler times. Only requesting $40B (for a total of $435B). The latest number is 70 times that amount.
In 1970 gold was around $100 an ounce. So onion was $0.1 a pound. and this is .001 ounce of gold. Today Onion is $1.50 a pound which is again 0.001 ounce of Gold.
So Prices are not gone up, we are paid less for the same work we did in 1970. We are being ripped off of our work.
Effective immediately, never again will there be another debt ceiling discussion, since Wall St. is now holding Washington a politcal prisoner forever.
Dow 15,000 Bitchez!!!
it will need a QE first before the DOW goes to 15000
Dow 15,000 in the year 2525 maybe if man is still alive.
not before a crash and QE3 rescue. Then Dow will go up to 11,000 if LUCKY. Then crash. Then up to 10,000, then crash. etc. GOLD!!!! up up up and awaaaaaaay! hahahahahaha
ITYM
HTH
The next war is going to be CDS war. American soldiers won't fire on their neighbors. So, swap. Get the US troops in to police one country and their troops come here. I wish it were funny and unlikely, but we already have blackwater calling for mercenaries to police our country. And before you say it, remember, we used a lot of mercenaries in the revolution and it is more popular than ever now that they act as the NBA/NFL draft by pulling people from the armed forces to do different but similar work for a price and without need for a conscience.
Credit Default Swap indeed.
The chart you show is deceptive. A better chart would show per capita debt. Also, how about a chart of per capita debt in ounces of gold. My calculations show it remains constant at 30-40 ounces of gold debt per capita since the 1940's. The exponential character of the graph is function of the collapsing value of the dollar, not of an outlandish sized debt.
It is most certainly OUTLANDISH, how can you say that 14.2 TRILLION is not. Per Capita debt is a bad measure as it doesn't account for things like interest rates, aging population and rating downgrades.
Do you know how much a trillion is? It is 1 million millions. Turn that over in your mind for a few moments. The goofs in Washington are spending 1.5 Million millions more than they collect every year now. Where will they ever find the money to pay this back?
Oh that's right they don't ever pay it back (history may not contrued as a guarantee, but it damn well gives an indiction) they just keep rolling it forward, doubling down, until they hit the table limit. The table limit is different than the debt limit, the table limit is when you are called to task and no more increases are allowed. That day is fast approaching, we may not be there yet. The house hasn't published the table limit. When we find the limit you WILL know. Greece, Italy et al are all finding out about that now.
Just one more mental exercise (if your mind can think big enough), multiply 3% times 14.2 trillion.
What did you get? 426 billion, yes that is somewhere near what we paid this year to finance the debt at the average rate of 3%. Do you remember what the Fed Funds rate was in 2007? 5%. In 2006 it was over 6%.
Now multiply 16 trillion by 5%, $800 million, at 6%, $960 million. Now maybe you see the problem? All it takes is one year from now, interest rates rise a few hundred basis points, and I'm being optimistic here, and we are paying nearly 1 trillion in interest payments.
Capiche?
Oké boys, it's been a fun week with the US debt target...
LET'S NOW FOCUS BACK ON THE EUROPEAN DEBT CRISIS!!
WHICH COUNTRY WILL SEE IT'S 10YR RISE OVER 7% FIRST? ITALY OR SPAIN?!
Mama mia - Italia!
Basta, basta!
if a picture paints a thousand words, you will find the conclusion @ the bottom of p4 to be: do not raise the debt ceiling!
too confusing?
The last graph: an addict in charge of his own drug supply.
How about the True Money Supply which is now expanding at an annual rate of 12%:
http://mises.org/content/nofed/chart.aspx?series=TMS
It really shows how doomed we are that there is not general outcry by the public over this foolishness. Just a bunch of fat, decliningly happy morons all shouldering incessantly for their spot in the great oil age, debt creating mirage that was the period from about 1920 to about 2020.
Monoploy money. Raise the ceiling n times infinity. And all you are doing is postponing apocolyptic fundamentals. These are essentially non-stories leading up to the delayed collapse. You just can't have such a warped and skewed income distribution which is ultimately inverted meritocracy, graphs, charts, algos, posturing, verbiage, etc. notwithstanding.
The best chart, debt ceiling vs. gold, should have been at the top:
http://www.zerohedge.com/article/gold-rise-143-trillion-us-debt-limit-increase-%E2%80%93-bloomberg-chart-day
A debt ceiling increase of 2.8 T on the current 14.3 T is 19.6%; if gold continues to track the debt ceiling AU should rise to $1945/oz. within 18 months.
But gold has been rising even faster, at $28/month over the last 30 months, which if continued puts AU at $2131 in 18 more months. Nice work Congress, and keep those compromises coming.
Where did I go wrong? My curve of personal wealth fell off the exponential curve about two decades ago.
Clusterfuckitization of your things. :P
Exponential curves always end badly.
#41
The Ponzi scheme is coming to the end. The exponential growth of debt/money is about to stop and tip over to the other side of the hill. These who will be smart enough to position themselves properly for the ride downhill, will be the new rich. Once we start rolling downhill, it will be very difficult to stop that black hole sucking the money away from the market and from our lives.
Fasten your seat belts.
Here is the National Debt in gold.
http://pix.cs.olemiss.edu/econ/nationalDebtInGold.jpg
See, no need for alarm. Soon a single double eagle will pay off the whole enchilada.
Real debt / GDP is closer to 1000%.
At that level not even world reserve cuuency status can keep the dollar from collapsing. It's just a matter of time now.
The blowback(which one can see in the ME) is what's going to be the blackest swan.
While the US tries to pimp off the debt-pocalypse that attempt is going to drive the lower 90% of the world to revolt. Notice how even our welfare client Israel is now being hit.
not so scary. looks like there is a lot more room to go up. it only gets really fun when the line crosses the axis and heads down the other side.
It looks even better if you graph it on arctangent paper.
It hasn't quite got to 90° yet, so we're OK! (whew)
The late, great Kurt Richebächer saw this coming - as a keen reader of his insights way way back in the early noughties (coupled with John Hussman's Weekly Comment, and Steve Roach's weekly audio presentations - before such things were called 'podcasts'), none of this has been even remotely suprising.
It has been an almost-untrammeled joy to watch the vindication of every tenet of the Austrian School, and the clear repudiation of the last vestiges of Keynesian twaddle by anyone whose paycheck does not depend critically on continued faith.
About now, the schadenfreude feels good, man... those who studied Mises and Hayek know that those two had to wait almost 70 years to be proved right about full-scale central planning, but their work applied in no less measure to the State in its entirety (i.e., 'mixed' economy social democracy). We are seeing the death-spiral dynamics that is the natural outcome of a system in which megalomaniacs operate with no profit motive (and no genuine budget constraint).
Obviously the impact on the polity is terrible, and will get much worse before it gets better. Hopefully it will awaken a bunch more people who will realise that BOTH 'sides' of politics - and the political means in its entirety - are the cause of, and can never be the solution to, society's problems.
Declaration of interest: nobody likes economic modelling these days either - my PhD 'grand-supervisor' (my supervisor's supervisor) - Leontief - was awarded the Nobel Prize the year before Hayek; like Misesians, economic modellers suffer in the outer darkness, primarily because the 'mainstream' suffers from the 'map is the terrain' problem in reverse: they think that economic modellers and econometricians believe that expository and pedagogic tools (2-input 2-good models, 2-asset models and so forth) are depictions of REALITY rather than shorthand mechanisms for keeping one's assumptions coherent and congruent with a sensible stedy-state... i.e., they think that WE think the same way as climate modellers (or their political overlords).
<- Reset
<- Let it continue to fester
Hey folks, if it was up to you, would you push the reset button? Or would you try to save the system?
the only person that I can recollect that ever had any success of getting his message across to the sheeple with his charts was Reagan.
Anyone have a chart of the CBO forcasted numbers vs. actual deficit numbers?
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