This page has been archived and commenting is disabled.

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.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/16/2012 - 09:59 | 2620002 mrktwtch2
mrktwtch2's picture

who is john galt??

Mon, 07/16/2012 - 10:12 | 2620057 SheepRevolution
SheepRevolution's picture

No more debt-money!

Mon, 07/16/2012 - 10:21 | 2620083 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

High debt/GDP is bullish for the dollar!

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

Mon, 07/16/2012 - 11:07 | 2620234 resurger
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.

Mon, 07/16/2012 - 16:10 | 2621487 engineertheeconomy
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.

Mon, 07/16/2012 - 10:21 | 2620084 FL_Conservative
FL_Conservative's picture

No more printing money either!

Mon, 07/16/2012 - 10:29 | 2620115 bigdumbnugly
bigdumbnugly's picture

1% vs. 21%

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

Mon, 07/16/2012 - 10:48 | 2620172 DaveyJones
DaveyJones's picture

priceless to speak

Mon, 07/16/2012 - 11:31 | 2620328 Anusocracy
Anusocracy's picture

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

Mon, 07/16/2012 - 10:24 | 2620094 oleander garch
oleander garch's picture

I believe John Galt is a pseudonym for Hank Paulson. 

Mon, 07/16/2012 - 10:51 | 2620186 bobnoxy
bobnoxy's picture

Who is John Galt? A fictional character in a book outlining a failed ideology that offered only political and societal cover for excess greed and selfishness?

Mon, 07/16/2012 - 10:57 | 2620202 sumo
sumo's picture

How much did Ayn Rand collect in social security and medicare payments?


Mon, 07/16/2012 - 11:02 | 2620219 bobnoxy
bobnoxy's picture

You mean like her ideological brother Milton Friedman, who lived the easy life as a professor, earning tenure so he couldn't be canned, enjoying three month's vacation each year, and getting a nice pension funded by others?

Mon, 07/16/2012 - 11:36 | 2620340 TruthInSunshine
TruthInSunshine's picture

John Galt, as you SockPuppet prototypes v1.06 know full well, is an individual who opts out of what's a morally hazardous game, rigged by an over-reaching and corrupt, bloated, rotted government.

John Galt, seeing the insanity and injustice of the system in how it treats actual producers, and rewards the non-producers at the expense of the producers, pulls a "Honey Badger" and refuses to give a shit, and pares down his/her consumption and contribution significantly.

Even Atlas shrugs, eventually. When it happens, you'll know, SockPuppets, for even your teat of the state mammary will dry up.

In fact, can't you feel it already underway?

Can you feel the John Galts multiplying hourly across this land of spoiled milk and rancid honey that the Non-Federal Reserve-less Non-Bank and CronyCapitalism (aka Socialism) have sewn?

Can you feel what John Galt does NOT have cooking?

Mon, 07/16/2012 - 13:13 | 2620769 A Nanny Moose
A Nanny Moose's picture

It's no use. The Sockpuppet robo-tr0//z are too busy pulling the same tired old, spoon-fed talking points out of their parasitic, television numbed, troll algorythm asses, to even understand poisoned well logical fallacy.

John Galt 2012

Mon, 07/16/2012 - 21:45 | 2622684 mark mchugh
mark mchugh's picture

Honey doesn't get rancid, ever.

Get some for the bunker.

Mon, 07/16/2012 - 11:08 | 2620236 The Limerick King
The Limerick King's picture



A poem on Objectivism

A source of societal schism

Some wisdom to hide

A psychopath's guide

The evil inside has arisen


Mon, 07/16/2012 - 11:08 | 2620239 FEDbuster
FEDbuster's picture

Was she forced to pay in? Or could she have opted out, and set up her own retirement and medical savings account?

Mon, 07/16/2012 - 11:34 | 2620341 bobnoxy
bobnoxy's picture

Who cares? The point is, she took it when she came to the realization that it might just save her ass. Just like the millions of rough, tough, right wingnuts who've taken Social Security, Medicare, Medicaid, unemployment benefits, food stamps, staples from a food bank and emergency federal assistance after natural disasters.

They all came to that same realization. Those programs were put in place with good intentions and can be lifesavers, as you don't know when it's your sorry ass that might need them to survive, or not get busted financially through no fault of your own.

At that point, no one cares if they're called Socialist or not. There, but for the grace of whatever higher power you prefer, goes your dumb ass. And you'll all have your hands out when the time comes too!

Mon, 07/16/2012 - 12:09 | 2620463 FEDbuster
FEDbuster's picture

"Who cares?"

Millions of Americans do.

There will be no "hand outs" when the producers stop producing.  When the parasites kill the host, there is nothing left for them to feed on but the corpse.  Maybe the FEMA camp slaves will be forced to produce some food at the government poor farms, but I doubt it?  The EBT class will cease to exist.

Mon, 07/16/2012 - 14:28 | 2621085 NidStyles
NidStyles's picture

Had she never been forced to pay into the scams, she probably would have been better off and had the savings that wasn't constantly depreciating in value.


Those programs are why many people are going broke when they shouldn't be, and those funds will never cover the people that it's promised to. It's not about being Socialist, it's about being unsustainable, and essentially theft. 

Mon, 07/16/2012 - 11:29 | 2620307 earleflorida
earleflorida's picture

Here's a great read about ford's [1974 nomination] chief council economic-adviser alan greenspan (reagan/ Chairman of  Fed 1987 nominated), and Clintons' rubin's & protege's {[summers][geithner]}___

*Gary Weiss __ "Ayn Rand Nation: The Hidden Struggle for America's Soul"

Ps. Rand hated regulation and greespan was her biggest and greatest [admirer] advocate

Ps2. also think about  Brooksley Born - OTC Derivatives Market [summers/harvard]

Mon, 07/16/2012 - 14:14 | 2621024 EINSILVERGUY

You asked the wrong question

How much did  she have confiscated by the govt?

Is she not allowed to receive back what was taken?  We can argue she might have received more but your premise is prejudicial



Mon, 07/16/2012 - 16:19 | 2621539 Joseph Jones
Joseph Jones's picture

About a year ago Michael Hoffman's Revisionist History newsletter (highly recommended) had an image of Judaic Alan Greenspan and Judaic Ayn Rand in the room with the then-President (Ford, IIRC), during Greenspan's swearing-in ceremony.  Alan took his oath of office with his hand over the Talmud, you know, the book with the verse stating "Even the best of the gentiles deserve only death." 

Apparently, if I have this correct (Rabbis and their enablers/defenders/sycophants please correct me), it's not evil, racist, biggoted, hate-mongering when a Judaic writes this (after all, per the Talmud, a Judaic is incapable of sin).  But it's always only "anti-Semitic" if/when you bring up this ugly, sordid religious ideology/philsophy.  Right.  And as Modanna once said, "Maybe monkeys will fly out my butt." 

I also love that other little Talmudic gem/prayer the Rabbis repeat daily: "Thank you god I'm not a slave, a gentile, or a woman."  Maybe any women and gentiles who are offended just can't take a joke?  Or maybe it's a sweet little metaphor we stupid goyim just don't get? 

"Borrower is slave to the lender."  (The Bible) 

Mon, 07/16/2012 - 12:52 | 2620666 malek
malek's picture

So let's try out that socialism ideology one more time! To hit two birds with one stone: confirming Einstein's defintion of insanity and Thatcher's problem with socialism at the same time!!

Mon, 07/16/2012 - 11:22 | 2620299 cypherk1
cypherk1's picture

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

Mon, 07/16/2012 - 10:02 | 2620004 Anne Ominous
Anne Ominous's picture

Bernanke. Every bubble has its prick...

Mon, 07/16/2012 - 10:50 | 2620174 DaveyJones
DaveyJones's picture

oh the irony of that statement

Mon, 07/16/2012 - 13:14 | 2620777 A Nanny Moose
A Nanny Moose's picture

Comment of the month, IMO.

Mon, 07/16/2012 - 10:00 | 2620008 disabledvet
disabledvet's picture

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

Mon, 07/16/2012 - 10:06 | 2620036 i-dog
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?

Mon, 07/16/2012 - 10:15 | 2620063 Snidley Whipsnae
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?

Mon, 07/16/2012 - 12:16 | 2620464 i-dog
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)

Mon, 07/16/2012 - 10:01 | 2620016 Zola
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.

Mon, 07/16/2012 - 10:11 | 2620051 sumo
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.


Mon, 07/16/2012 - 10:35 | 2620136 sunaJ
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.

Mon, 07/16/2012 - 10:11 | 2620054 FEDbuster
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?

Mon, 07/16/2012 - 10:20 | 2620076 LawsofPhysics
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.

Mon, 07/16/2012 - 10:30 | 2620117 sumo
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.

Mon, 07/16/2012 - 10:45 | 2620162 FEDbuster
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)?

Mon, 07/16/2012 - 10:55 | 2620199 LawsofPhysics
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.


Mon, 07/16/2012 - 10:59 | 2620206 duo
duo's picture

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

Mon, 07/16/2012 - 11:01 | 2620214 FEDbuster
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.

Mon, 07/16/2012 - 12:05 | 2620449 Anusocracy
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.

Mon, 07/16/2012 - 12:59 | 2620701 Random_Robert
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. 

Mon, 07/16/2012 - 14:44 | 2621129 NidStyles
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.   

Tue, 07/17/2012 - 00:45 | 2623198 DaveA
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?

Mon, 07/16/2012 - 11:01 | 2620213 neidermeyer
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...

Mon, 07/16/2012 - 10:49 | 2620173 Arnold Ziffel
Arnold Ziffel's picture

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

Mon, 07/16/2012 - 12:18 | 2620462 neidermeyer
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 ...

Mon, 07/16/2012 - 10:20 | 2620078 azzhatter
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

Mon, 07/16/2012 - 10:33 | 2620131 sumo
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 ...

Mon, 07/16/2012 - 11:11 | 2620242 Vagabond
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.

Mon, 07/16/2012 - 12:27 | 2620546 Anusocracy
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.



Mon, 07/16/2012 - 12:53 | 2620672 FEDbuster
FEDbuster's picture

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

Mon, 07/16/2012 - 20:22 | 2622336 Anusocracy
Anusocracy's picture

Call them foragers-they graze on the productive.

Mon, 07/16/2012 - 10:23 | 2620087 Broomer
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."

Mon, 07/16/2012 - 10:25 | 2620099 LULZBank
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."

Mon, 07/16/2012 - 10:41 | 2620150 TrainWreck1
TrainWreck1's picture

More like driving full throttle and running out of road.


Mon, 07/16/2012 - 10:26 | 2620101 Snidley Whipsnae
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.

Mon, 07/16/2012 - 10:52 | 2620187 FEDbuster
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.

Mon, 07/16/2012 - 10:32 | 2620124 shuckster
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?

Mon, 07/16/2012 - 10:47 | 2620171 Snidley Whipsnae
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...

Thu, 07/19/2012 - 22:09 | 2634628 shuckster
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... 

Mon, 07/16/2012 - 10:46 | 2620169 El
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.

Mon, 07/16/2012 - 10:55 | 2620196 FEDbuster
FEDbuster's picture

The banksters already have the power, they always have had the power.  Maybe this is a giant fight between "elite" banksters like the five families of the mafia fighting for complete control?  

Mon, 07/16/2012 - 11:13 | 2620257 owensdrillin
owensdrillin's picture

They want power for sure but they can collapse the system and be sitting on the sidelines with cash and gold and buy the rest of the world at five cents on the dollar. I'm pretty sure that is in the plans somewhere.

It worked before in the depression.

Mon, 07/16/2012 - 13:17 | 2620790 A Nanny Moose
A Nanny Moose's picture

Never attribute to malice, that which is adequately explained by stupidity.

Mon, 07/16/2012 - 10:57 | 2620203 DaveyJones
DaveyJones's picture

how many bankers does it take to screw a lightbulb

Mon, 07/16/2012 - 11:06 | 2620222 FEDbuster
FEDbuster's picture

None, most have never had to change one and never will.

Seriously, I knew and estate attorney who called an electrician to change light bulbs when they would burn out.  Their garage had nothing but cars and a garbage can in it, no tools in the entire house.

Mon, 07/16/2012 - 15:02 | 2621214 NidStyles
NidStyles's picture

Tools are for the working servants. Real gentlemen use guile to con people into working for useless pieces of cotton that don't even make suitable ass paper. 

Mon, 07/16/2012 - 10:02 | 2620018 Everybodys All ...
Everybodys All American's picture

How ironic that I see a smiling Obama birthday card ad next to that chart.

Mon, 07/16/2012 - 10:23 | 2620089 TrainWreck1
TrainWreck1's picture

He's even looking at it - kinda creepy.

Although what else would one expect from someone that has a birthday card/donation request.

Lowest-class president ever.


Mon, 07/16/2012 - 10:02 | 2620019 DogSlime
DogSlime's picture

That chart really is frightening.

There can't be any way out of this except a very big reset, surely?

...apart from a World War, of course, or a virulent global plague.

How could that debt be inflated away without going Weimar?

I feel sick.

Mon, 07/16/2012 - 10:05 | 2620034 Winston Churchill
Winston Churchill's picture

War or Weimar, but not until after Obumney's election.

If they can hold it off til then.

Mon, 07/16/2012 - 12:02 | 2620439 roadhazard
roadhazard's picture

Can't borrow any money to have a war that is why It's all saber rattling toward Syria and Iran. Is China going to lend us the money for a big war like they do for Iraq and Afghanistan. No, and a shooting war is the worst possible scenario. Nation building or rebuilding is over except in the case of Civil War and at this point whatever is next will be economically poorer than previous revolutions.


Mon, 07/16/2012 - 10:18 | 2620069 tmosley
tmosley's picture

In reality, a war will only make it worse.

That is, unless we decide to have a TOTAL war, and remove all regulation on wartime production, then leave it off when we return to peacetime.  Fat chance of that, though.

Mon, 07/16/2012 - 10:35 | 2620135 LawsofPhysics
LawsofPhysics's picture

Wartime production has never stopped.  Look at the DoD budget as a percentage of total spending since WWII.  In addition, aside from the financial lobby, the industrial war complex has the second largest army of lobbyest on K street. Wake the fuck up Tom.

The captial and resource mis-allocation and mal-investment continues.  Get physical and sleep well.  You have physical, so why worry.

Mon, 07/16/2012 - 10:02 | 2620020 zero19451945
zero19451945's picture

There is a serious problem when you are deficit spending at 8%+ of GDP and only generating 1% "growth."

Your theories simply aren't working.

Mon, 07/16/2012 - 10:03 | 2620021 Winston Churchill
Winston Churchill's picture

Sums are a bitch.

No math required to see where this is going.

Mon, 07/16/2012 - 10:03 | 2620023 doomandbloom
doomandbloom's picture


Mon, 07/16/2012 - 10:05 | 2620031 moskov
moskov's picture

The END GAME is surely near!

Either we are going to have a NEW BRENTON WOODS MEETING or there will be a WW3 ahead.


You choose and you decide

Mon, 07/16/2012 - 10:07 | 2620038 Winston Churchill
Winston Churchill's picture

Make them hold the conference in SE Washington DC.

Mon, 07/16/2012 - 10:08 | 2620042 Quinvarius
Quinvarius's picture

Sadly, we don't get to choose.  People who think WW3 will benefit them get to choose.

Mon, 07/16/2012 - 10:10 | 2620047 buzzsaw99
buzzsaw99's picture

nobody cares anymore moskov. one can only be terrified of ww3 for so many decades then it wears off.

Mon, 07/16/2012 - 10:26 | 2620105 Broomer
Broomer's picture

Watch "Threads" and tell me with a straight face your fear wore off.

Mon, 07/16/2012 - 10:16 | 2620052 Village Smithy
Village Smithy's picture

The plutocrats are not finished looting. They need to use the money they've already stolen to jack equities to near all-time highs before they off-load them to the Fed in a "National Emergency". Kinda like last time.

Mon, 07/16/2012 - 10:52 | 2620073 DutchDude
DutchDude's picture

Iran is backing down due to boycots etc.

Only country that could throw sh*t at the fan is Israël...

Europe is too devided on the Israël-Iran conflict so it's unlikely they get themselves involved.

I'm not sure if the big guys have the balls to go all-in against China or North-Korea because the USA will loose against China and China will back up North-Korea.

the rest of the "war on terror" countries haven't done enough bad things to cause a world war.

Thing is; after WWII all countries became so economicly linked, that a war with China will instantly bankrupt the USA due to the strings China hold.

Therefore i believe there will be a "brenton woods meeting" before a global war. It's the logical thing, only thing we need is politicians who have the guts to admit it and act on that fact.........o....wait.....

Mon, 07/16/2012 - 11:00 | 2620211 LawsofPhysics
LawsofPhysics's picture

Wake the fuck up.  The Chinese state government and the U.S. elites have been on the same page for decades.  The chinese were given unprecendented access to American markets for one thing and one thing only - to get the world to work for chinese wages.

Follow the money.  

Mon, 07/16/2012 - 11:10 | 2620246 Winston Churchill
Winston Churchill's picture

Where do you get that Iran is backing down ?

Mon, 07/16/2012 - 14:09 | 2621004 roadhazard
roadhazard's picture

 Not backing down but economically being trashed. The people now have to pay full price for gas and everything is in short supply. They have no credit and a pretend military. They are not, "winning". I'm all for letting Iran have nukes because they are surrounded by countries that have them. Pakistan has a hundred nukes and still haven't shot one at New Deli. North Korea knows better than to use one. Israel is not supposed to have them but has since Eisenhower told them no and they stoled the plans.

The Cuban missile crisis must have told you something about nuclear deterrence on both sides. In the old days it was called, a Mexican standoff.

I <3 nuclear missiles.

Mon, 07/16/2012 - 10:05 | 2620032 HD
HD's picture

21% APR with 1% cash back...the new QE will be for free airline miles.

Mon, 07/16/2012 - 10:16 | 2620064 sudzee
sudzee's picture

There will be no QE3. The 800billion dollar bazooka in 2008 turned into a conjured up 12 Trillion bandaid. The FED realizes that it would need to nuclear bomb the system with tens of trillions just to muddle thru for another few months. The FED is DEAD, RIP.

Mon, 07/16/2012 - 11:01 | 2620215 LawsofPhysics
LawsofPhysics's picture

I wish.  Let's see, what happened the last time anyone tried to destroy The Fed?  Hedge accordingly.

Mon, 07/16/2012 - 10:08 | 2620040 tony bonn
tony bonn's picture

" every incremental dollar of debt generates ever less bank for the GDP buck...."

mpd has been negative for quite some time.....the fake gdp and inflation numbers continue to give false evidence that the economy is growing but it most emphatically has been shrinking since 2000....

Mon, 07/16/2012 - 10:08 | 2620041 Village Smithy
Village Smithy's picture

The greatest wealth transfer in history.

Mon, 07/16/2012 - 12:48 | 2620642 Anusocracy
Anusocracy's picture

Done through the greatest con in history: government.


Your genes predispose you to want government because you think your survival is enhanced by it.


Actually, the opposite is true for almost everyone. Only a select few benefit.

Mon, 07/16/2012 - 10:08 | 2620043 caimen garou
caimen garou's picture

humm...bullish chart!

Mon, 07/16/2012 - 10:10 | 2620045 Snakeeyes
Mon, 07/16/2012 - 10:10 | 2620046 TomGa
TomGa's picture

Karl Denninger now writing for Zero Hedge?

Mon, 07/16/2012 - 10:10 | 2620049 falak pema
falak pema's picture

lol! some runaway orient express.

Mon, 07/16/2012 - 10:14 | 2620060 buzzsaw99
buzzsaw99's picture

deficits don't matter [/ronald raygun]

Mon, 07/16/2012 - 10:14 | 2620062 JustObserving
JustObserving's picture

US unfunded liabilities are $119.8 trillion and increasing at $6.7 trillion a year.  That dwarfs the debt which is currently $15.88 trillion.

It will be politically impossible to cut social security and medicare and so these unfunded liabilities are real as some California cities are finding out.

Mon, 07/16/2012 - 10:21 | 2620085 Tyler Durden
Tyler Durden's picture

Let's not get into the myth, and magic, of the global welfare state. It gets some people out of joint, all of the time.

Mon, 07/16/2012 - 10:44 | 2620151 Dr. Richard Head
Dr. Richard Head's picture

Whatever the state entities cannot extract from the plebes with taxes and dollar debasement, they will extract that needed revenue in the form of constant harassment and monetary shakedown of the citizens locked in the control grid - in the name of societal welfare.  Love our captors, for they love us.

Mon, 07/16/2012 - 11:00 | 2620209 DaveyJones
DaveyJones's picture

math is much more inconvenient than economics

Mon, 07/16/2012 - 10:18 | 2620071 Broomer
Broomer's picture

How can you Americans increase your government debt by more than 1/5 in one year?

At this rate it will double each four years. Are you in war with Martians?

Mon, 07/16/2012 - 10:29 | 2620112 Tom Green Swedish
Tom Green Swedish's picture

No the government (Barry Soetoro no evidence of whether he renounced his Indonesian Citizenship) is trying to destroy the country so he can implement a new Socialist regime.

Mon, 07/16/2012 - 11:06 | 2620229 Al Huxley
Al Huxley's picture

Well sure, when you put it that way it SOUNDS really bad....  But hey, if you ignore the obvious it's really not so bad.  Look at the USD - pretty sold uptrend, obviously the preferred global currency.  And Treasuries?  - solid bull market, looking maybe even to go parabolic soon, reflecting their grand global safe-haven status, and the mad desire of everybody on the fucking planet to loan money to the bankrupt and insolvent US Govt (or else just the mad lemming-like behaviour of global 'investors' looking at the charts, listening to the MSM and their advisors and pushing and shoving each other for a good shot at leading the charge over the cliff).

Mon, 07/16/2012 - 10:19 | 2620077 doc_in_the_house
doc_in_the_house's picture

spx @ 1350 = down -7 points

covered my spx shorts of 1365 last week @ 1326-1328....will WAIT for 1370+ later this week to the meantime = yawn!! and relax.

Mon, 07/16/2012 - 10:26 | 2620086 Ignorance is bliss
Ignorance is bliss's picture

At this point the dollar demise is a question of when and not if. Too much shit hitting the fan lately... Gold and Silver are certainly important, but what does it mean to loose a currency. Russia's 1998 collapse was probably the closest thing.

1. We knew the economy sucked. Retail sales are simply a reflection of a zombie economy

2. China creating bi-lateral trade relationships with all countries that matter. That is the real threat to unsustainable dollar supremacy.

3. The increasing size of the internal security apparatus and militarization of the police force.

4. American public is arming themselves. Gun sales are at record levels.

5. The corruption within the system: Libor, Fast and Furious, MF Global, PFG, Enron, PM manipulation, mortgage fraud, JPM Energy manipulation case, and whatever else comes our way.

6. A presidential campaign: Two sides of the same coin. The status quo stays the same.

7. General Unemployment over 20%

8. Youth unemployment over 40%

9. The bond bubble

10. The education bubble

11. The debt of the U.S. Govt 16 Trillion

12. The debt of the state and municipal Gov'ts

13. Age of the nation

14. mortgage fraud

15. Housing malaise

16. Europe: House of cards collapsing


My new favorite phrase: "Don't be a victim"


Mon, 07/16/2012 - 10:27 | 2620108 azzhatter
azzhatter's picture

We've had a good run

Mon, 07/16/2012 - 10:25 | 2620093 Tom Green Swedish
Tom Green Swedish's picture

Current "Democracy" in the USA.  Socialism = Democracy.  Spend more on crap for losers here and the Middle East.  Cut taxes for crap for growth in China, Mexico and other outsourced nations.

Mon, 07/16/2012 - 10:24 | 2620095 kahunabear
kahunabear's picture

And yet, it appears our credit rating just keeps getting better as we pay lower and lower rates. Kinda like when the unemployed guy in CA could buy that million dollar home. Look how that turned out.

Mon, 07/16/2012 - 10:26 | 2620104 econprof70
Mon, 07/16/2012 - 10:36 | 2620122 Winston Smith 2009
Winston Smith 2009'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."

Where's the rest of that sentence?

And you should point to this excellent graph from 2010:

Diminishing marginal productivity of additional debt

But your column is exactly correct.  Debt/GDP is the elephant in the room that the vast majority of so-called "experts" aren't even taking into account.

Mon, 07/16/2012 - 10:39 | 2620145 ItsDanger
ItsDanger's picture

Still not anywhere near rock bottom.  Only then will people take serious action.   Go around and talk to different groups of people.  No one wants to sacrifice anything.  Most people want someone else to take the hit.  Everyone needs to give up a % of their standard of living.  Wont happen for a while.

Mon, 07/16/2012 - 10:42 | 2620154 Bicycle Repairman
Bicycle Repairman's picture

"Everyone needs to give up a % of their standard of living."

Won't happen ever, unless wartime rules are applied.  Even then the reduction will most definitely not be "equal".

Mon, 07/16/2012 - 10:39 | 2620146 LawsofPhysics
LawsofPhysics's picture

So the capital and resource mal-investment and misallocation continues.  Great.

Mon, 07/16/2012 - 10:41 | 2620148 Judge Arrow
Judge Arrow's picture

 The real world consequence of this is to take away the legitimacy of the state. One big tune out of the government in the US will, unlike Greece, lead to revolt of the civilized in many forms on many fronts. Failure in the US this time, well, it will be different than Europe; liberty still means something and the producers, the real producers, will be at war with the takers (the majority). The corruption at the top now exemplifies the distortions to occur as it will become impossible to distinguish between the Corzines and the real producers in the minds of the takers - one and the same to the current President. Producers even now are equated by the government as feed lots of the state. All distinctions will be lost. A strong underground economy will be raided again and again until producers resist wholly. This is in its infancy now, but will grow rapidly in the next few years as more fascists get elected. Big business, government unions, government agencies unite with the takers against the producers - this is in full song right now but has yet to precipitate a crisis, just bleeding. But, a chart like the above highlights the great probability of an event that leads to collapse. As producers work with producers an underground economy will emerge, even now emerges. It will be different, will thrive via the internet, where govt agencies increasingly will spy to intervene and regulate to control. Right now, there is not a coalescing idea or pattern, but it will come and when it does, it will in time, collapse the fascist state, but that is a long way off.

Mon, 07/16/2012 - 10:44 | 2620160 Bicycle Repairman
Bicycle Repairman's picture

If at any time the state feels they are losing an important part of their "legitimacy", they will ramp up conflict and restore it.

Mon, 07/16/2012 - 13:07 | 2620738 Anusocracy
Anusocracy's picture

It's only natural:


There is one situation, however, in which all of the well-established social structure evaporates: when a group of rhesus macaques confronts another one and monkey warfare begins. Rhesus macaques dislike strangers and will viciously attack their own image in a mirror, thinking it’s a stranger threatening them. When warfare begins, “Even a low-ranking rhesus loner becomes an instant patriot. Every drop of xenophobia in rhesus blood is transformed into fuel for battle,” Maestripieri wrote.

Humans and Monkeys Share Machiavellian Intelligence

Mon, 07/16/2012 - 10:44 | 2620159 mademesmile
mademesmile's picture

This is the first chart that gave me chillls.

Mon, 07/16/2012 - 10:45 | 2620166 Bicycle Repairman
Bicycle Repairman's picture

What would happen if the owners of this debt disappeared?

Mon, 07/16/2012 - 11:10 | 2620248 Everybodys All ...
Everybodys All American's picture

we would call that the history of the socialist movement.

Mon, 07/16/2012 - 10:50 | 2620177 Ricky Bobby
Ricky Bobby's picture

I show this fact to my family and friends and ask "Are there any limits to the state?" and most look at me like I am crazy. In their world view it is merely a matter of political will. The lack of prosperity, resources, money, opportunity, or any human need has nothing to do with natural law and exists only because of a large group of unenlightened greedy Neanderthals. If it is good theoretically “i.e. everyone should have the absolute best health care” then it is just a matter of political will.  I make the argument that even if I agree how do we pay for all this. When I make this argument then I become an unenlightened obstacle. I guess I am the hopium smoker to expect anything different. 

Mon, 07/16/2012 - 10:53 | 2620194 Bicycle Repairman
Bicycle Repairman's picture

If the state controls the perception of reality, then the state's power is limitless.

Mon, 07/16/2012 - 11:21 | 2620292 Winston Churchill
Winston Churchill's picture

Had this conversation with an employee.His responses;

They will pay.The man will pay.The Govt. will pay.

Didn't even try to explain reality.A waste of breath,

and now a waste of this  country.


Mon, 07/16/2012 - 11:50 | 2620398 Village Smithy
Village Smithy's picture

They can't be blamed, that is what they have been taught. It is the unintended consequence of setting up a government funded entity to provide free education. If you are the recipent of government largesse are you ever going to seriously teach people that the money does not really grow on trees?

Mon, 07/16/2012 - 14:32 | 2621096 lucidwanderer
lucidwanderer's picture

or if you're my ex wife and her die-hard-democrat-leftie family you can just live off my personal alimony largesse.  i'm basically a money-growing tree.

Mon, 07/16/2012 - 13:25 | 2620828 Anusocracy
Anusocracy's picture

Talk to the hand 'cause the face ain't listening.


Basically you are talking to his reactive animal behavior. His higher brain functions are not engaged, if he has any higher brain functions.

Mon, 07/16/2012 - 12:13 | 2620482 meghaljani
meghaljani's picture

You better shut up, or your family members will report you the Department of Homeland Security. 

Mon, 07/16/2012 - 10:51 | 2620184 Uncle Remus
Uncle Remus's picture

Soooo, this is a bad thing?

Mon, 07/16/2012 - 11:03 | 2620223 NEOSERF
NEOSERF's picture

And the retail/hotel/restaurant largesse provided by a 50 cent drop in the price of gasoline in the last 3 months is over and will be back to $4 by T-giving...US "growth" will be 0.3% by end of year assuming no shocks...

Mon, 07/16/2012 - 11:05 | 2620226 GlomarHabu
GlomarHabu's picture

The literate, informed, and engaged in this country cannot hope to overcome the ills of the republic when it's population grows less literate, bowls alone, and has an average IQ hovering 'round the century mark. It's that simple.

Mon, 07/16/2012 - 11:08 | 2620238 kito
kito's picture

gdp as in governmental domestic product, because without that 1.3 trillion in deficit spending, the game is up and gdp would very very negative.................

Mon, 07/16/2012 - 12:45 | 2620621 PulpCutter
PulpCutter's picture

"...because without that 1.3 trillion in deficit spending, the game is up and gdp would very very negative..."

Exactly.  But with the deficit spending, total US debt/GDP is dropping and we're on our way out of the recession (though the mess is Europe is dragging at us).  Same strategy we and many others have used many times before.

Mon, 07/16/2012 - 11:16 | 2620272 MFL8240
MFL8240's picture

The Problem In A Nutshell:  Obama and a complete lack of leadership!

Mon, 07/16/2012 - 12:43 | 2620612 PulpCutter
PulpCutter's picture

Clinton handed Bush an economy that was BOOMING, and running surpluses.

Bush handed Obama an economy that was in a kamakazi dive.  The fact that we aren't a pile of flaming wreckage (yet) is to Obama's credit.

The economy crashed due to over-leveraged banks; why do the Republicans de-fund the WallSt regulatory agencies at every budget crunch?

Mon, 07/16/2012 - 11:32 | 2620331 Wags
Wags's picture

That is prehaps the scariest of all statistics. A 21% rate of growth of debt reults in a 1.1 projected GDP? Batten down your personal hatches as it just might be a struggle to save what you already have.

Mon, 07/16/2012 - 12:42 | 2620610 PulpCutter
PulpCutter's picture

Relax.  The author made the number up - it's wrong.

Mon, 07/16/2012 - 11:44 | 2620371 RaymondKHessel
RaymondKHessel's picture

The debt will never be paid thats obvious. Next step is for all retirement accounts to be nationalized, SS age to be bumped to 69 then 72 then 0.

Mon, 07/16/2012 - 11:48 | 2620386 EmileLargo
EmileLargo's picture

I hate to disappoint the Dollar bears on this forum but I have a feeling that the US has a LONG way to go before the markets bolt at the risk of holding USDs and USTs. It took Japan a decade to sail into the zone of the imponderable (above 240 percent debt to GDP). The US is only at 102 percent AND has the world's premier reserve currency. On that basis, the pols in Washington believe they can comfortably kick the can down the road well past their tenures in the Senate/the House or the Presidency. Also, if the whole world keeps going to hell in a handbasket, i.e. the Eurozone and then Japan, the "safe haven" loving idiots will keep piling into the US debt market. This means that the US has even more breathing time.

I wonder if we will be discussing when the day of reckoning finally arrives on this day in 2018? We might as well be. The day of reckoning will arrive, no question. It's the date that is debateable. Which also means we are a LONG way away from a gold top. Keep stacking the shiny stuff fellas.

Mon, 07/16/2012 - 13:10 | 2620744 Bartanist
Bartanist's picture

The way I see it, the central banking authority and its owners have the ability to pull the plug on the economies of the world (except in those areas where they have no influence, such as ...ummm ... Iran & Syria ... and until recently Northern Africa) any time they want. The question I think that you are answering is whether they ALSO have the ability to keep the economies of the world running under the fraudulently constructed fiat money distribution system.... or will it be forced to implode at some point, whether they try to keep it going or not?

My guess is that even though the record length of time for any fiat currency has been 62 years, the current group of thugs, thieves and fraudsters can keep things going for a longer period of time. The real question is whether they will find it to their advantage to keep it going or decide to exert/transfer control in another way.

It makes me wonder exactly why some people feel compelled to be self serving and frankly, evil. Maybe it is because at the top of the "pyramid" IS their "god" Lucifer, or whatever name he is going by these days.

Mon, 07/16/2012 - 13:45 | 2620899 Anusocracy
Anusocracy's picture

They are compelled for the same reason the alpha bull, when stuck in a corral with only other bulls, is compelled to mount another bull.


The reason is, it's a survival trait. A tail on the bell curve survival trait.

Mon, 07/16/2012 - 12:23 | 2620526 earleflorida
earleflorida's picture

911  ???

mission accomplished...

Mon, 07/16/2012 - 12:30 | 2620547 PulpCutter
PulpCutter's picture

Check your facts.  The post's central assertion is wrong: US total debt (public and private) is currently dropping, and never was rising at 21% year.  You may be confusing total debt, and public debt.  We are deleveraging private debt at the fastest rate since the 1950s. 

Sorry, Armageddon has been postponed.


In fact, since the recession ended in June 2009, total U.S. debt has risen at the slowest pace since they began keeping records in the early 1950s. While Washington has taken on a lot of debt since then, the private sector has paid off, written off or dumped on the government almost as much.

As a share of the economy, debt has plunged as a consequence of rapid deleveraging by families, banks, nonfinancial businesses, and state and local governments. The ratio of total debt to gross domestic product has fallen from 3.73 times GDP to 3.36 times.

In the 11 quarters since the recession officially ended, total domestic debt has risen by just $702 billion, or 1.4%. By contrast, in the 11 quarters before the recession began, in those bubble years of 2005, 2006 and 2007, total debt increased by $10.7 trillion, or 28%.


Mon, 07/16/2012 - 12:38 | 2620596 PulpCutter
PulpCutter's picture

We are following the usual path out of a credit bubble recession:

1) Demand drops due to over-leveraged private sector.

2) Govt stimulus steps in to provide (some of) the missing demand.  Public sector debt climbs, while the private debt level drops.  This is happening now.  We are shedding private debt (some by default, of course) at the fastest rate since the early 1950s.  GDP has been climbing slowly and steadily since 2009.  Total debt (public and private) to GDP ratio - a measure of how difficult it is to pay the debt off - has been dropping since 2010. Same for South Korea and Australia.

Sorry, no Apocalypse.  Keynes & Krugman were right; von Mises was wrong.

Do NOT follow this link or you will be banned from the site!