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The Problem In A Nutshell: Annualized GDP Growth Of 1%; Annualized US Debt Growth of 21%
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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Thinking they are meaning government debt, but even that is not mathematically correct.
On another post right on this site, just a few posts up, TD claims American total debt/GDP will stabilize at 113%. TD flatly contradicts what they've posted here.
http://www.zerohedge.com/news/imf-says-japan-and-spain-are-done-debt-rat...
I know TD is a group of posters (used to include Mark Pittman), and they provide some of the fastest market commentary on the web, but on the political side of things they seem pretty brainwashed - or schizophrenic.
Dude - I'm afraid you cut your own pulp and it's bleeding badly. Seek medical care soon. Also the overall situation still can't make you happy or you would be on ZH trying to get to the bottom of this sordid mess our bank clepto's have us in now. Whatever the total or public debt ratio is, ~0% interest to the investment banks fuels insane markets, banks get to own the commodities we need to eat, Bush and Pickens hedge funds get to own the water we need to survive and charge us whatever they want to for it. GG was wrong....greed is not good and we're being pushed to the brink and it's probably not an accident.
Dont forget to get your pulp cortorized. Cheers.
Gosh, it is almost as if Obama and Bill Ayers planned it that way in some sort of global communist conspiracy.
We are borrowing 9% of GDP so no politician has a 5%+ contraction in GDP while they are in office....and bernanke doesnt think balance sheets are relevant according modern economic theory...neither do most stock analysts today
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What most fascinates me is the number of people with a "golly, gee whiz!" attitude in their sudden discovery that fake money and debt don't really help...
Well done Mr B.B., for every dollar of debt added we get five more pennies in GDP.