The Problem In A Nutshell: Annualized GDP Growth Of 1%; Annualized US Debt Growth of 21%

Tyler Durden's picture

While economists may waste lots of hot air debating this, that and the other about the future growth trajectory of the US economy, in the aftermath of Goldman's cut of US GDP to just a 1.1% annualized rate of growth. And with the fiscal cliff, debt ceiling, Europe, China, and a plethora of other unknowns up ahead, this number will certainly decline further. Now here lies the rub: as the chart below shows total US marketable debt has doubled in the past 4 years, or an annualized growth rate of just above 21%. And as Zero Hedge has shown before, total US Debt/GDP is on the verge of crossing 102%, the highest since WWII. Simply said, the divergence between the two data series will only accelerate as every incremental dollar of debt generates ever less bank for the GDP buck. And that, from a "sustainability" perspective, is what the problem is in a nutshell.

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mrktwtch2's picture

who is john galt??

Mr Lennon Hendrix's picture

High debt/GDP is bullish for the dollar!

King Rahraaaaaah!!!!!!!!!!!!!!

resurger's picture

Snake Eyes - By Resurger Not a new ZH story, hope you like it


There is an International rigged casino in this world it's called "Financial Market", it was very popular, everyone has participated in it, the volumes gambled are in trillions and trillions of dollars on daily basis, the most dangerous and infamous lucrative game was called "Craps", the house  has vowed, guaranteed that everyone will be a winner and this time is really different since it has lost a big chunk of its credibility in one game in 2008 and till now, but people are awaking slowly.


That night of 2008  wasn't like any other night, a craps table full of chips, started with billions and the bids soared to trillions, there were two gentlemen on that table, a lean muscular handsome dulcet man, very eloquent, charming and intellect, in his late twenties they called him "Charmo"

 I swear to you that he was better than houdini when he rolled, he was a master in escaping that gorgon gaze, and on top of that he was a winner 99.49% of the time


 He kept stacking them high, everyone was giving him their chips to roll, and he certainly made money for everyone who bet with him from a sucker who was sitting due to his old age on the other end of the table.


There he was, a man who looked like a dark angel in his mid eighties, very arcane and quite, you feel the birds can nest on his head, with a cowboy hat that shed shadows to veil  his eyes, in fine creased black suit and a jacket which looked like a devil cloak, He had a mountain of chips, he kept on loosing them for the past 2 hours.

Someone from the crowd walks towards me "Hello, can you tell me what exactly that coot is betting and why is he waiting for so long?"

"Her eyes, the snake eyes" I said.

"What is that?"

"There is 0.505532% probability to see her eyes for every 25 rolls, you get 1 pip on each dice, the game rules are broken, Charmo wins on any combination, even the boxcars, but snake eyes is reserved for that old man, he is allowed to roll once and he can go all in only once, this is no ordinary night mate "

 " Thanks"

 " My pleasure"

I have aligned big amount of chips with him, all of this is a big circus, and he was the whale that i always wanted to slay for a very long time... I have met him in 1987 and back in 2001, and now it's 2008, he never changes his attitude, he hires the best magicians in the world, especially the pompous superficial young ones, he's about my age we were both born in 1948, It's his game.


Charmo made obscene money off that old man, and everyone wanted more and more, the stacks and the wagers were getting higher and larger, it take 5 minutes alone to arrange for the bet, so imagine how spectacular that was and how rich my cousin was.

But it was the 17th roll, "Charmo" got tired and weary, sick of flattered hollow compliments and it was about time that he takes those two fine good looking scantly clad fine ladies back to the suite with a Bollinger & Ace Midas dipped in an ice bucket, with all that cashed greenery.


Got greedy and irrational in his inner thought's is to eliminate that old man with one final crushing blow, and why not, the bet was that anything other than snake eyes wins! So he made the move, and asked the mummy to shoot.


The wicked but venerable grandfather didn't budge for 2 minutes, and then he left his head and looked at the stick man and nodded quietly.

"All in" The stacks of the old mans chips were so large that it made sure it will make each and everyone who was betting against him rich for the next 1000 years, Charmo is "All in" ready to put an end to the old man misery.


Silence was the mode, it was like a god walking in judgment day among sheer mortals towards "Charmo" slowly hand's the dice to "Charmo" and whispers to his ears "Roll your destiny!"

Charmo the best shooter in the world, the too smart to fail was so intoxicated and buck wild, so confident that he has forgotten that the one he is up against is his master, under the influence he is now just focusing one thing, "the tower of chips that you have is all mine now." he replied.

What happens next? You already know ... He got to see her eyes for the very first time which shattered his illusions, fantasies and his dreams along with the others who were betting with him are now biting the dust. "I never saw it coming, even the best makes mistake, that includes all of you who were with me" that was his response. He was murdered one week later at the behest of his master.


Vini Vidi Vici, that was his attitude, a true perverse man who looked like if he has reigned Satan and the entire world to be his slave. When i went to the casino to get my loot from the havoc that he has created, they took me 4 levels underground through a secret elevator, they handed me a steel suitcase with 12 gold ingots instead of my chips and an envelope that contained a letter with four words which confirmed what my sworn enemy and i believed in for long time, that the fortune always favors the bold.

engineertheeconomy's picture

Don't be stupid. If we were printing the money and loaning it to the Bankers instead of the other way around, they would owe us money.

So the problem in a nutshell is that the criminals have control of the government/military, and the people are too high on marijuana to give a fuck.

bigdumbnugly's picture

1% vs. 21%

you know, 20% here, 20% there, and pretty soon we're talking some real percentages.

DaveyJones's picture

priceless to speak

Anusocracy's picture

A pessimist looks at this as a problem, an optimist looks at this as a challenge to build faster printing machines.

oleander garch's picture

I believe John Galt is a pseudonym for Hank Paulson. 

cypherk1's picture

Who is John Galt is correct. They will just continue nationalizing.

Anne Ominous's picture

Bernanke. Every bubble has its prick...

disabledvet's picture

But how do I subordinate US debt when the Fed is buying everything?

i-dog's picture

That's a lot of IOUs the Fed is collecting!!

I wonder just how many they'll collect before they consider sending out 'Slugger' Louie to do some knee cracking?

Snidley Whipsnae's picture

The Fed can continue to buy Ts at near ZIRP or jack interest rates and destroy the Fed, what remains of US/world economies, the US Gov and some other govs...

What would you do?

i-dog's picture

Given only those two choices, I'd immediately jack interest rates!!!!

I'm one of those old fashioned types that only lends money to people who can pay it back!

So....I'd tell the federal government to either cut spending by 50% RFN or I'm sending in Louie to get some of that $17 trillion back! A horse's head in Jeetner's and Pelosi's beds might help them to focus on the problem.....

I'm not sure how to break the news to you, but the current paradigm of shipping in oil, iCrap, Beemers and marble benchtops for the "middle class" urban palace and princesses, then sending out increasing volumes of IOUs to those who are either digging it up or piecing it together, is OVER! FINI! VORBEI! KAPUT!

This means that swipin' yo' EBT to bling up da house - whether in Boston or Brussels, Atlanta or Athens - is over. The Chinese and Russians and Iranians and Venezuelans and Vietnamese are no longer going to put up with working under missile-point, 20 hours a day for $1 an hour, in order to support your "insulting and beneath my can I afford 8 pizzas a day on that!" minimum wage of $7/hour to turn a hamburger, and government paper-pusher wage of about $1,000/hour (for about 100 hours work/year, of which just one hour is performing any necessary "service").

Whether we the people dissolve the federal governments and get each of our home states in order, one by one, each in its own way, or whether the "really smart" Pharisees who got us to here bring the whole feckin' lot down over a "SURPRISE!!!" bank-holiday weekend and announce the new "rules" from the seat of world government, it WILL happen, one way or the other. The status quo is now statum preteritum.

Just weeks to 3 months left to pre-empt 'their' decision, IMO.

/rant (I feel better now)

Zola's picture

Free markets made up of smart investors would notice this trend and have jacked up rates on treasuries higher to force cuts. Now with the total thugocracy in play in both finance and politics , natural feedback stabilizing loops have been jettisonned and it now only remains to wait for the final and total catastrophic collapse.

sumo's picture

It's going to be spectacular, historic collapse. My grandparents lived through the Great Depression, and were scarred by it for life.

The collapse that is coming will put that in the shade.


sunaJ's picture

Muppetology: verse 4 (religious)


Little Miss Muppet
Ignored the sixth trumpet -
A warning the righteous would heed.

When the economy crashed,
Humanity's hope dashed;
"The Lord cometh," bellowed Heaven's white steed.

FEDbuster's picture

So what do TPTB have to gain by collapsing the system?  Is a totalitarian, world government with never ending martial law and mass death and starvation their vision of the future?  Maybe it is?  A friend of mine challenged my "economic collapse" scenario, by asking these same questions.   What do the banksters gain by totally collapsing the system?  Do they have control of the beast they have created?  I have some thoughts, but what are some of yours?

LawsofPhysics's picture

You miss the fact that most of the "elites" I talk to actually belive that they can control the outcome.  Hence they don't think a collapse scenario will be that bad, this is the fundamental problem everyone is missing.  They really are arrogant enough to belive that, yes, they can control the beast and the outcome of a systemic collapse.

Nature is a harsh teacher and humanity itself is the largest ponzi ever created.  What of this "fourth turning"?  It's on, bitchez.  Time for Nature to redefine "wealth" for everyone, again.

sumo's picture

"most of the "elites" I talk to actually belive that they can control the outcome."

Exactly right. The script goes like this:

We have it under control. Our superior frontal lobes are more than sufficient.

Uhh, we need to use extraordinary measures, so just sign this blank check.

Whoa, no-one saw it coming.

FEDbuster's picture

I get the taking the system to the brink in order to get bailed out (allowing them to continue to steal more money), but what benefit do they get when the bailouts don't work and the system crashes?   Governmentt, police and military iare already training for martial law and the break down of society here in the US.   Most of us here know the Ponzi can't continue forever, what do "elites" gain by a FUBAR society (like a French Revolution)?

LawsofPhysics's picture

I don't think most wealthy folks really give a shit.  As an example, one of the venture capital guys I know has a plantation in Barbados.  He has a family the lives on the grounds that cares for the plantation and provides the food for his family and the former black ops guys that accompany him when he flys in on his private jet.  How do I know this?  I have been lucky enough to visit. Beautiful location, but it speaks more to my point regarding the world these elites live in.  These guys simply don't care and they really do belive that they are "chosen" people.  They live in another world and have the resources to do whatever the fuck they want while everyone else grinds away fighting over the "two party" system, all the while having no real "choice" at all.  Same as it ever was.

Should things get real ugly, you will know where these people are, because when you approach their property a sniper will take you out at 200-500 yards and you will never see the infared beam from the scope that took you out.  Please, wake up.


duo's picture

Remember, if you have to put pants on every day, you're not one of the elite.

FEDbuster's picture

That was what I have been thinking.  They "use a Country up", then move on to the next one.   With retreats all over the world and the ability to "bug out" in a few hours, they are immune to devastation they have created.

Anusocracy's picture

No different behavior than that of the Lords and Masters of the past.


In fact, no different than that of alpha-males going back millions of years.


People are a resource to be used for their survival and wellbeing.

Random_Robert's picture

"These guys simply don't care and they really do belive that they are "chosen" people.  They live in another world and have the resources to do whatever the fuck they want while everyone else grinds away fighting over the "two party" system, all the while having no real "choice" at all.  Same as it ever was."


I believe that this is a crass over-generalization.


Anyone who inspires others to be productive (and true to themselves) is to be revered, unless and until they come to EXPECT the productivity of others to carry their water.


You see, our brains are wired in one of two distinct ways:

1) We have an esteem that prevents us from seeing other people as equals. We MUST find our masters and serve them.


2) We have an esteem that helps us to understand that learning never stops, and nothing lasts forever in a natural system - entropy all but guarantees that percieved stability is a spectre.


I have a friend that creates businesses in 3rd world countries, not by consuming the fruits of cheap labor, but by TEACHING people how to interact in a manner that allows for greater production than consumption, with the excess employed as the capital that spawns further growth. His life's mission is to prove to the "undeveloped" world that the creation of banker induced "sovereign credit" is antithetical to a healthy growing economy...


He will lose in his quest, but I must still admire the nature of his ambition. 

NidStyles's picture

I don't think many of those people realize that everything they use to sustain their lifestyle is made by the same people they are screwing over. Good luck getting replacement parts and alloys for your planes when the mines go out of business and supply dries up. Good luck getting ammo, and defending yourself when the supplies dry up. 


Having been in the Military and knowing how infallible even the best soldiers can be in duress, I know that those so called "elites" don't stand a chance when the shit hits the fan. Even the most hardened soldier can lose his nerve if the stress levels and the situation gets chaotic. 


To add 200-500 yards is nothing, I can hit human sized targets out past 1K meters with good reliability with a lowly .308 cal. In my circle of shooters, I'm a damn novice. I know guys that shoot out to a mile and beyond regularly. There's only a few cats in the Military that can do that. I know because I was on the team that scored the longest confirmed kill with a .30 caliber rifle. It was quite a ways past a mile, and only took two shots to terminate the target. The guys I know that do the ELR shooting, they make the SF cats and Recon guys I worked with look like amateurs. When a guy with cheap 10x scope can drop a .338 round on a human sized target at 2K meters with one shot, you know that the guy squeezing that trigger is a scary mofo. These are the guys that train the Military shooters, and they only train those guys to their abilities, they don't show them how to excel. What I am trying to say is that the "Elites" are probably aware that their plans will not suceed, only the most arrogant narcissist would assume that they are safe.   

DaveA's picture

Just curious, when your rich friend flies in to the plantation with his black-op guys, where are their families? What protects against a "Commando" scenario, where the chief bodyguard's daughter is kidnapped, and her "ransom" is that he must kill his boss?

neidermeyer's picture

You're giving them WAY too much credit, they don't have any plan for that other than to trust in Obama to give them continuing status as "elites" with their dachas and ZIL (GM) limo's ... the breakdown of society control stuff you mentioned is for those free thinking radicals that believe in free markets and self reliance...

Arnold Ziffel's picture

Remember Ben saying he is 100% sure he can control inflation? I htink it was a Dianne Sawyer interview.

neidermeyer's picture  I would suggest downloading "youtube downloader" or a similar product and saving these clips. Bernanke saying 100% is at 7:36 into the clip and he spits it out at double the speed of his other comments ,, he is obviously uncomfortable with the statement. At 8:38 he states that we need 2.5% GDP growth just to maintain employment at current levels ...

azzhatter's picture

It's a fair question. Who gains by a total collapse? The people who want to reshape the world in their way. Probably think we have too much population, too much freedom. They have always despised the middle class because they are too independent. Poor people are much easier to manage. Bread and circus is all they need. That pesky middle class is too demanding

sumo's picture

It's education, see? Once people have the knowledge and freedom to start thinking for themselves, it just leads to all sorts of trouble. Luckily we have an MSM and a political system that can fix that ... Now if we can just shut off this Internet thing ...

Vagabond's picture

I'm sure they've got the primary providers in their pocket already... They can't shut down the Internet, but they can do quite a bit of damage.

Anusocracy's picture

Exactly. The liberals want the world to be a recreation of the hunter-gatherer world.


The conservatives want their pharaonic world recreated.


Each of their survival chances are enhanced by recreating the world best suited for their survival.


Of course, humankind as a whole suffers. Neither culture developed in the modern technological world and neither is conducive to it.



FEDbuster's picture

I thought most liberals were against hunting?  So, I guess that just leaves the fruits and nuts to be gathered.

Anusocracy's picture

Call them foragers-they graze on the productive.

Broomer's picture

It's the big Great Game of "Not On My Watch."

Don't worry, militaries all over the world are preparing to play the next one, "Last Man Standing."

LULZBank's picture

The collapse is not engineered, but more like aninevitable outcome of the system.

Like driving full throttle and you know sooner or later you are going to run out of fuel.

Or like a ponzi scheme which you know is going to fal under its own weight one day.

Now there are people who know this would happen and pretend they can control it and there are people who would "never see it coming."

TrainWreck1's picture

More like driving full throttle and running out of road.


Snidley Whipsnae's picture

" What do the banksters gain by totally collapsing the system? Do they have control of the beast they have created? I have some thoughts, but what are some of yours?"


If the Fed wanted to collapse the system/strengthen the dollar's position as world reserve currency they would increase interest rates or simply stop buying Ts through their primary dealers... either would collapse the system quickly... But, it would destroy the Fed, Wall St, the US and other governments, the world economy, most fiat currencies, etc...

They will kick the can as long as possible... uncontrollable increases in food and energy prices might be the straws that break up the game...maybe not. 

Since I believe that the Fed/treasury/Wall St/London are in bed together they may be able to control all mkts much longer than I thought possible. It's a wait and see, kick the can, play for one more day in the sun, etc, deal. As more info comes to light I can see that they have a much tighter reign on mkts than I thought.

FEDbuster's picture

That was my friend's position.   The current "elites" have it pretty good right now, most of the money and all of the power, so why would they be motivated to have full on riots, looting, burning, guillotines, etc...?  Now it it is truly out of their control at this point, they might be scrambling to grab as much as physical stuff as they can, build their retreats and prepare for the worst like some of us are doing.

shuckster's picture

What do the elites gain by collapsing the system?? Everything. More for them, less for everyone else. The power to give and take. They gain more control. Once people, en masse, start to throw their hands up in frustration and say "fuck it, I'm done", the elites will have no one to resist their authority. By fostering total dependence on them, they cement their legacy in eternity. They will have power, unrestricted by time or space. They will be able to buy themselves longer lives, they will have a constant conveyor belt of fresh flesh to satisy their basest desires. What's not to love?

Snidley Whipsnae's picture

Robespierre thought for a while that he had achieved ultimate control over all of the French Citizens... untill one fine day they whacked his head off.

It's a fact that all tyrants attempt to reinvent or remold human nature by use of terror... and it never works for long. The one constant throughout history is human nature.

Tyrants, rather than adopt/invent a system that accommodates human nature try to bend humans to fit into a tyrannical system. Hell, for all I know there is no system that is accommaditive of human nature over a long span of time. Over long time spans the systems that are pretty good for the majority become distorted by a few azzhats that want it all.

It's much more difficult to stay on top of the heap than it is to reach the top of the heap...

shuckster's picture

Indeed - the very fact that we are talking about it means that sooner or later things are going to snap.  Then again, we may just be the ones getting whacked for our incessant complaining.1984 may have been more of a warning to dissenters to shut up than anything else... 

El's picture

Seriously? What did Napoleon have to gain? How about Hitler? Mussolini? Come on...where is your friend's brain? Did he completely skip out on history lessons while at school? This sort of thing has been going on from the beginning of time. It is all about power...same as it ever was.