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As US Debt To GDP Passes 101%, The Global Debt Ponzi Enters Its Final Stages

Tyler Durden's picture




 

Today, without much fanfare, US debt to GDP hit 101% with the latest issuance of $32 billion in 2 Year Bonds. If the moment when this ratio went from double to triple digits is still fresh in readers minds, is because it is: total debt hit and surpassed the most recently revised Q4 GDP on January 30, or just three weeks ago. Said otherwise, it has taken the US 21 days to add a full percentage point to this most critical of debt sustainability ratios: but fear not, with just under $1 trillion in new debt issuance on deck in the next 9 months, we will be at 110% in no time. Still, this trend made us curious to see who has been buying (and selling) US debt over the past year. The results are somewhat surprising. As the chart below, which highlights some of the biggest and most notable holders of US paper, shows, in the period December 31, 2010 to December 31, 2011, there have been two very distinct shifts: those who are going all in on the ponzi, and those who are gradually shifting away from the greenback, and just as quietly, and without much fanfare of their own, reinvesting their trade surplus in something distinctly other than US paper. The latter two: China and Russia, as we have noted in the past. Yet these are more than offset by... well, we'll let the readers look at the chart below based on TIC data and figure out it.

That the Fed is now actively monetizing US debt is beyond dispute (although some semantic holdouts remain - we are quite happy for them). Alas, with China, which has traditionally been the biggest buyer of US paper, no longer buying Treasurys, we are confident that the Fed will have no choice but to be dragged kicking and screaming once again into the fray, especially since traditional buyers of paper, even when allowing for exponential repo market leveraging (and someone please look at what is going on in the BoNY, State Street sponsored $15 trillion quicksand of repo'ed securities, which is the biggest black hole in the shadow banking system and will be the next pillar of the ponzi system to collapse) will be unable to keep up with US issuance. Especially since Primary Dealers already saw their Treasury holding rise to an all time high in the past week, and are loaded to the gills with US paper. So who is buying? Why Japan and the UK.

Japan and the UK? Hmm, if these two names sound oddly familiar, allow us to refresh one's memory. Behold the pristine leverage condition of both these two countries, in all its glory.

Hint: look at the far left.

So somehow the world's two most indebted countries (recall that Japan is about to in total pass 1 quadrillion debt) are out there and buying up the biggest amount of US debt (after the Fed of course)? Sorry, but while we are amusing by this attempt by the global ponzi regime to keep itself alive (even as Russia and China prudently step aside from the mauling that is sure to follow), whereby the most indebted nations keep buying each other's debt in the most transparent and potentially deadly shell game in history, we are also confident this is unsustainable. Which means the Fed will have no choice but to step in. And since when it comes to the capital markets, the ride up is over since we have now crossed the point where incremental profits are drowned by incremental input costs (thank you $106 WTI), the Fed now has just one mandate: to keep the US fiscal machine well-greased by buying up US debt at zero (and beginning in May negative) rates, through wanton monetization. 2012 may prove to be quite eventful after all.

 

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Tue, 02/21/2012 - 18:31 | 2182501 EscapeKey
EscapeKey's picture

To infinity and beyond!

Tue, 02/21/2012 - 19:02 | 2182570 MillionDollarBonus_
MillionDollarBonus_'s picture

OMG! Check out this vid!

http://www.youtube.com/watch?v=964rEJ8KsoI

Brad Pit absolutely PWNS libertarians and Ron Paulite loons for their ignorance!! LOL. I feel sorry for doomer libertarians. Not only are they totally wrong about economics and morality they are also uncool.

 

Tue, 02/21/2012 - 19:14 | 2182609 EscapeKey
EscapeKey's picture

I will vote for whoever E! Networks tell me to vote for.

Coolness sorted (after all, that's more important than financial health)!

Tue, 02/21/2012 - 19:44 | 2182693 whstlblwr
whstlblwr's picture

Visionary gives more money to RP, he's not scaredy cat to admit support for RP.

http://money.cnn.com/2012/02/20/news/economy/peter_thiel_ron_paul/

All of us give money to help RP win.

https://secure.ronpaul2012.com/

Wed, 02/22/2012 - 01:11 | 2183515 Temporalist
Temporalist's picture

Your Brad Pitt is so 2009; Brad Pitt is in with Ron Paul

The Daily Show 2/1/12

http://www.youtube.com/watch?v=AkAc_Cwd4ig

Tue, 02/21/2012 - 21:30 | 2183038 DeadFred
DeadFred's picture

Brat Pitt is certainly my go-to guy for sage advice! LOL

Tue, 02/21/2012 - 19:20 | 2182623 ATM
ATM's picture

You're an arrogant fool with no knowledge of history. This shit has played out many times before and each time asswipes like you were saying the same thing - everything is fine, we don't have to worry about the spending, about the debasement of the currency. It feels good so do it.

Until people are rioting in the streets.

People like you are the most dangerous among us. Maybe you should figure out what that means as history is repleat with examples of what happens to you and Brad Pitt in the end.

Tue, 02/21/2012 - 19:29 | 2182642 MillionDollarBonus_
MillionDollarBonus_'s picture

Lol whatever loser!! Brad Pit is probably the single most COOL person in the world, and he has totally rejected your lame libertarian theories. Lay off the lectures NERD.

Tue, 02/21/2012 - 19:51 | 2182708 whstlblwr
whstlblwr's picture

Super cool, he endorsed RP and said he'd be hanging out with him.

Really ATM, you've been here year and still respond to MDB this way, my complaint is he seems to be dim-witted.

Wed, 02/22/2012 - 09:59 | 2184392 ATM
ATM's picture

Maybe you didn't notice my new Avatar. I'm now the Honey Badger because I just don't give a shit and I take what I want!

Tue, 02/21/2012 - 20:11 | 2182791 RealFinney
RealFinney's picture

Exactly, Brad Pitt is a big star who makes films with the most profitable studios in the world.

 

He certainly would stoop to be in some anti-bank, anti-debt, anti-consumerist polemic.

 

Right Tylers?

Tue, 02/21/2012 - 20:18 | 2182810 davey
davey's picture

Youve got a lot to learn million dollar bonus,maybe you'll grow up one of these days.i will be laughing at you as gold hit 25 hundred.

Tue, 02/21/2012 - 20:18 | 2182811 itstippy
itstippy's picture

Brad Pit oozes cool from every pore.  They should make a Summer Blockbuster Action Flick where Brad Pit plays Tim Geithner and he has to race against time to defuse the National Debt Clock before it hits $15T.  That would be AWESOME! 

Tue, 02/21/2012 - 20:30 | 2182848 economics1996
economics1996's picture

 

He (Brad Pitt) is tight with the Hollywood Yids and fucks Angelina Jolie; his brain is made of shit, which is why the Yids probably love him.

 

Tue, 02/21/2012 - 21:14 | 2182998 WonderDawg
WonderDawg's picture

He's an idiot. Left Jennifer Anniston for the psycho-sexual Angelina. What a moron. Left a cool lady for a slutty weirdo. Not cool at all in my book. You can't buy class. You either have it, or you don't. Sorry, Brad and Angelina are sorely lacking.

Tue, 02/21/2012 - 22:20 | 2183132 victor82
victor82's picture

Yes, but didn't he play a fellow named Tyler Durden once in a movie?

Wed, 02/22/2012 - 09:58 | 2184387 ATM
ATM's picture

No that was Edward Norton.

Tue, 02/21/2012 - 20:25 | 2182833 Dr. Engali
Dr. Engali's picture

Best troll ever. I see you caught a whopper.

Tue, 02/21/2012 - 21:25 | 2183024 Al Gorerhythm
Al Gorerhythm's picture

He ain't funny no more.

Tue, 02/21/2012 - 22:59 | 2183201 Al Gorerhythm
Al Gorerhythm's picture

Lay off the hopium pills, wanker.

Tue, 02/21/2012 - 20:24 | 2182828 Dr. Engali
Dr. Engali's picture

MDB caught him a fish. Hook line and sinker. Watch him real it in.

Wed, 02/22/2012 - 02:57 | 2182991 Al Gorerhythm
Al Gorerhythm's picture

You have tried to warn, admonish and educate a complete moron. You are wasting your energy whilst he wastes oxygen. This is a mind that cannot adjust, nor absorb. He (sic) is a sociopath who believes (re. frequent postings) that the so-called elites (money counterfeiters) and social-engineer fascists (bought-and-paid-for government lackeys and their bureaucrat handlers), the people who got us into this mess (by design, using the Rothchild formula), want to learn from their mistakes and valiantly lead us to salvation. "Trust the experts!" is his worn out logic.

MDB. I hope, come the revolution (if it's not a peaceful one) that you have the courage of your convictions (and convictions will happen) that you wear your colors on your sleeve, but preferably on your forehead. Its a big one, so get an A3 copy of your avatar and staple it to your skull (shouldn't hurt, no sense..... no feeling). Oh, and don't slink off when it gets hot, mmmmkay.

Wed, 02/22/2012 - 04:15 | 2183919 AnAnonymous
AnAnonymous's picture

You're an arrogant fool with no knowledge of history. This shit has played out many times before and each time asswipes like you were saying the same thing - everything is fine, we don't have to worry about the spending, about the debasement of the currency. It feels good so do it.

Until people are rioting in the streets.

____________________________________________________

Every of these crisis, marked at some point by the currency being turned down. The currency bought less and less because people refused to sell their products in exchange of the currency.

US citizens have learned from history. They have made sure that a large number of countries that provide key commodities for any society can not walk away from their currency. They are trapped. And the USD will keep buying those commodities for a long time.

The drama is different in the making. The downfall will not come from the bottom of the consumption ladder refusal to trade, but the impossibility to trade because those countries will no longer have enough to sell against USD. Depletion of resources.

As to riots, they have been there for some time now, but in irrelevant places.

Riots in US citizen countries? US citizens who no longer belong to the US citizen world are moving to places where the riots are considered irrelevant.

Dont worry, be happy is real.

Tue, 02/21/2012 - 20:06 | 2182780 lunaticfringe
lunaticfringe's picture

MDB. Did your mother buy you luggage when you graduated from middle school?

Tue, 02/21/2012 - 20:08 | 2182788 azzhatter
azzhatter's picture

Man, I've just been waiting and waiting for Brad Pitt to tell us what to do. Finally he speaks> sarc

 

Good actor/major douchebag

Tue, 02/21/2012 - 20:31 | 2182855 alphabrew
alphabrew's picture

A+

Tue, 02/21/2012 - 20:34 | 2182873 Abitdodgie
Abitdodgie's picture

He is married to the CFR what do you expect.

Tue, 02/21/2012 - 21:58 | 2183103 trav7777
trav7777's picture

he's never been a particularly good actor...he's just a guy that looks like redford. 

Wed, 02/22/2012 - 00:41 | 2183432 respect the cock
respect the cock's picture

The fuck scene in Thelma & Louise was pretty good.

Tue, 02/21/2012 - 20:30 | 2182853 alphabrew
alphabrew's picture

That video was dumb.  Seriously, Pitt's lips were moving but didn't say anything.  "I've been to a Socalist country.  We're fine."  What the fuck ever, dude.

Tue, 02/21/2012 - 23:49 | 2183003 Al Gorerhythm
Al Gorerhythm's picture

He lives in a socialist country and we're not fine. What a fucking dolt (Pitt). On par with MDB. Pitt wouldn't know a socialist if one pissed on him (which they are) and MDB wouldn't know honesty if it hit him between the eyes.

Pitt and MDB trapped in the Democracy labyrinth. 

Wed, 02/22/2012 - 07:20 | 2184132 economics1996
economics1996's picture

Its all good if you are making millions per movie.

Tue, 02/21/2012 - 21:23 | 2183020 Al Gorerhythm
Al Gorerhythm's picture

OMG! Check out this vid!

OMG! Check out this moron!

Tue, 02/21/2012 - 21:27 | 2183029 rodocostarica
rodocostarica's picture

congrats MDB you got the PIT part right.

Tue, 02/21/2012 - 22:49 | 2183177 trip kitchen
trip kitchen's picture

MDB, what gives, is this a drinking game for you?  Another red arrow, another shot of Cuervo?

Tue, 02/21/2012 - 23:24 | 2183256 cranky-old-geezer
cranky-old-geezer's picture

 

 

Brad Pit absolutely PWNS libertarians and Ron Paulite loons for their ignorance!! LOL.

Actually no.  Not even close.  He bitched about people (in general, no specific group cited) saying USA is heading toward socialism and the government is "dismantling the country". 

Socialism isn't correct.  Fascism is.  

And yes the government has been dismantling the country, starting with dismantling our manufacturing base and sending it overseas.  Ok the government didn't do it.  Companies did.  But the government set up tax laws and such making it advantageous for companies to send manufacturing overseas.

Not only are they totally wrong about economics and morality they are also uncool.

Ok, now we know what's important to you, "being cool".  You'll follow anybody if they're "cool".

Most "cool" people ...the ones you worship... know jack shit about economics.

And you haven't displayed any knowledge of economics here, except maybe Keynesianism, which is bullshit.

Tue, 02/21/2012 - 19:08 | 2182599 john39
john39's picture

Not a slam at all of Ron Paul or those who back him, but here is somethying to consider:

http://youtu.be/J9er6Jy48SE

Tue, 02/21/2012 - 20:04 | 2182776 whstlblwr
whstlblwr's picture

Need to consider that this is a movement that doesn't need televsion. Wife's parents start to question why news doesn't show Ron Paul, what are they scared of?

We send them clips and show all his support from local papers, that are hidden from national news. They are close to changing support for Obama to Paul without MSM. Fuck you TV.

Tue, 02/21/2012 - 21:19 | 2183013 Al Gorerhythm
Al Gorerhythm's picture

They'll only cover it when the fuckwads running the MSM stations feel their legitimacy is threatened. Too late you treasonous cunts. You have already flown your colors. We won't be needing your services.

Tue, 02/21/2012 - 19:06 | 2182595 Common_Cents22
Common_Cents22's picture

"To infinity and beyond!"   Wasn't that Ben Lightyear?

Tue, 02/21/2012 - 21:37 | 2183058 TooBearish
TooBearish's picture

Now that's fukking FIGHT CLUB....nuke everyone's Visa account...ha!

Tue, 02/21/2012 - 18:32 | 2182502 non_anon
non_anon's picture

if only

Tue, 02/21/2012 - 18:55 | 2182557 tekhneek
tekhneek's picture

nothing at all.

Tue, 02/21/2012 - 20:31 | 2182857 economics1996
economics1996's picture

No way your girfreind is that hot.

Tue, 02/21/2012 - 18:39 | 2182508 LawsofPhysics
LawsofPhysics's picture

"the Fed is now actively monetizing US debt is beyond dispute"

Something that the Bernanke said he would never do.  fucking execute this guy already.

 

" Behold the pristine leverage condition "  that is halarious, reminds me of a Monty Python skit about a meeting between companies that stacked things on top of other things.

Tue, 02/21/2012 - 18:55 | 2182538 TruthInSunshine
TruthInSunshine's picture

The Bernank's greatest quotes (thus far). Be afraid. Be very afraid:

 

  • (November 15, 2005) "With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly."
  • (July, 2005) "We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though."
  • (October 31, 2007) "It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions."
  • (November 21, 2002) "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost."
  • "The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities."
  • "One myth that’s out there is that what we’re doing is printing money. We’re not printing money."
  • (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) "The Federal Reserve will not monetize the debt."

 

Bernanke Lies Under Oath re: Monetizing Debt - YouTube

 

Bernanke tells 60 Minutes reporter that Fed IS "printing money," and that the Fed is NOT "printing money," within 21 months (same reporter) 

 

Tue, 02/21/2012 - 18:56 | 2182565 taniquetil
taniquetil's picture

Saying the Fed is not printing money is like claiming that giving an alcoholic a bottle of booze and saying "well I'm not getting him drunk." And yes, this metaphor does work on multiple levels.

Tue, 02/21/2012 - 18:59 | 2182574 kaiserhoff
kaiserhoff's picture

Well done.

Now as to Tyler's question, a buyer might be anyone who wanted risk free yield..., oh wait, that was yield free risk.

Tue, 02/21/2012 - 20:52 | 2182937 mick_richfield
mick_richfield's picture

OK, so, to logically extend this list, here's what Bernanke will be saying in the near future:

1. "I do not think we will need a nuclear war to fix the mess we made by printing all this money."

2. "I do not think we will need an intercontinental nuclear war."

3. "I do not think they will let me into one of the COG bases."

4. "I do not think."

 

 

 

Tue, 02/21/2012 - 20:55 | 2182953 Kayman
Kayman's picture

to produce as many U.S. dollars as it wishes at no cost."

Sorry to burst your bubble Ben, but there is one hell of a cost.  Printing is untreated financial cancer and you are already too late.

Tue, 02/21/2012 - 19:00 | 2182579 Everybodys All ...
Everybodys All American's picture

Right now we don't have one courageous congressman who has what it takes to stand up to this madness. It is utterly sad to know not one guy or gal whether dem or rep will just simply show this chart to him and say does this look sustainable and by the way didn't you perjure yourself? Which effectively means they are all apart of the charade/problem.

Tue, 02/21/2012 - 19:22 | 2182628 ATM
ATM's picture

actually there is one congressman who has done so for over 20 years.

Tue, 02/21/2012 - 19:41 | 2182672 Everybodys All ...
Everybodys All American's picture

I love RP but he is falling short of my expectations. Bernanke needs to be stopped.

Tue, 02/21/2012 - 20:07 | 2182785 knightowl77
knightowl77's picture

What do you expect 1 congressman to do? Promote him up to CinC and we'll see what he can do

Tue, 02/21/2012 - 21:33 | 2183049 Everybodys All ...
Everybodys All American's picture

Call for his resignation. Impeachment proceedings for lying to Congress is the start. If Bernake is monetizing our debt. Which he is. This is an impeachable offense. Period. Dollar debasement is not in his mandate. Ron Paul is a smart man but even he does not for some reason have the courage it takes to stop this BS. BTW he said he would and so far he has been tepid in his financial oversight I hate to inform you. Which is sad because he really gets it.

Tue, 02/21/2012 - 21:04 | 2182974 Road Hazard
Tue, 02/21/2012 - 18:36 | 2182510 margaris
margaris's picture

how accurately can the GDP be calculated anyway?

Tue, 02/21/2012 - 18:38 | 2182519 Alcoholic Nativ...
Alcoholic Native American's picture

If I remember correctly from macro 101,  you just insert made up numbers into a pre algebra equation

.

Tue, 02/21/2012 - 18:56 | 2182567 Bobbyrib
Bobbyrib's picture

I thought that was the formula for CPI.

Tue, 02/21/2012 - 19:21 | 2182624 TruthInSunshine
TruthInSunshine's picture

And NFP.

Tue, 02/21/2012 - 21:14 | 2183002 margaris
margaris's picture

All of you pass!

I asked because I had a problem with the title "As US Debt To GDP Passes 101%...."

Both GDP and Debt are so fudged... how can they be compared with a 1% resolution.... not even 20% would make sense...

Tue, 02/21/2012 - 19:03 | 2182589 Eally Ucked
Eally Ucked's picture

You have to work backwards. First you know the result of your calculation (according to real world, you can't to fudge too much) then you throw in ingredients and mix them together very carefully. The rest is just elementary school math so it must be very accurate. 

Tue, 02/21/2012 - 18:39 | 2182515 chinaguy
chinaguy's picture

The well documented "China is selling while UK registered accounts are buying for China" process sorts undermines any "China is dumping" plot....based on figure 1.

Tue, 02/21/2012 - 18:40 | 2182523 john39
john39's picture

maybe, or maybe that story is a cover for the Brits buying or even the Fed...  doesn't really matter in the end.

Tue, 02/21/2012 - 18:46 | 2182536 Tyler Durden
Tyler Durden's picture

Pull up a longer-term data chart, i.e., longer than just 1 year, which shows China vs England pre and post the annual revision, and you will see why in this case, the is no longer the case.

Furthermore, pull up November and December TIC data. Note the decline in China and UK holdings? Or compare China and UK holdings from September through December. Same. Here, we'll make it easy for you - source.

Tue, 02/21/2012 - 19:03 | 2182587 Clint Liquor
Clint Liquor's picture

It appears the trend is not the FED's friend.

 

Tue, 02/21/2012 - 20:56 | 2182933 chinaguy
chinaguy's picture

Only commenting on this article and this chart...it show y-o-y China down 5% and UK y-o-y up 180%...you can talk about noise..from Nov & December 3% China & 4% UK  respectively...but the UK fluctuates 3-5% w/ EVERY TIC revision (from YOUR data source link). So whatever, Pandora's Box has been opened again. Thanks for making it easy.....

Tue, 02/21/2012 - 22:19 | 2183130 oldman
oldman's picture

Thanks, Tyler

A green for your promptness.

In studying the list, it is not obvious where the buyers for the next trillion dollars of US debt Will come from----Iceland, Ecuador, Israel, Libya, Iran,?????

I don't think so-----and China probably wants to unload another 100 billion, if not more.

Maybe, Queenie has some more funds, but this definitely looks a lot more interesting than Greece and the ECB.

Wow, this is exciting---when do we get started----I do want to watch this show!         om

Wed, 02/22/2012 - 00:52 | 2183472 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Thank you for the link/data.

Looks like HK and Singapore have dumped quite a chunk also.

Tue, 02/21/2012 - 19:38 | 2182659 DosZap
DosZap's picture
  • chinaguy
  • And your thoughts on this??
  • China sells,and has UK buy back for them?.Purpose?, WHO is holding the bag when it blows.?
Tue, 02/21/2012 - 21:01 | 2182948 chinaguy
chinaguy's picture

No, its been well documented on ZH...(well, before monthly TIC noise was suddenly redefined as an outlier anyway). China wants to saber rattle that "it's selling US treasuries" but needs, in fact, to buy them for a plethora of reasons, so it buys them through UK holding companies.

Tue, 02/21/2012 - 18:37 | 2182517 fnordfnordfnord
fnordfnordfnord's picture

Overdrive baby

Tue, 02/21/2012 - 18:39 | 2182521 Stuck on Zero
Stuck on Zero's picture

To go where no man has gone before.

Tue, 02/21/2012 - 18:40 | 2182522 Let them eat iPads
Let them eat iPads's picture

Russia's almost out of paper.

Smart cookies, those Russkies.

Tue, 02/21/2012 - 18:52 | 2182551 InconvenientCou...
InconvenientCounterParty's picture

If by smart you mean ruthless fascists with an inferiority complex.

For those that would extend a hairless neck for Iran, please don't forget some love for Russia.

Tue, 02/21/2012 - 19:28 | 2182638 DosZap
DosZap's picture

Let them eat iPads

Yep and Putin said they were going FULL tilt boogie, on rebuilding their armed forces, as the USA has gone wild,and they are no waiting to become the next target.

Tue, 02/21/2012 - 18:44 | 2182529 grid-b-gone
grid-b-gone's picture

First Renko red brick today in a long time today. Transports have been trying to lead the way down for a couple weeks. Is print and pump losing effectiveness or are we just in for another rinse and repeat cycle?

Tue, 02/21/2012 - 18:44 | 2182531 Bunga Bunga
Bunga Bunga's picture

Don't worry. The biggest number a 64-bit register of a cheap computer can store is 18,446,744,073,709,551,616.

 


Tue, 02/21/2012 - 18:48 | 2182542 Alcoholic Nativ...
Alcoholic Native American's picture

We need more anonymous billionaires buying debt.

 

Save us anonymous billionaires! 

Tue, 02/21/2012 - 18:50 | 2182544 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Psshh...math!  Obama don't care about no math!  He jest wants to git 'Merca worken'!

Tue, 02/21/2012 - 21:55 | 2183098 Kali
Kali's picture

And, wow, what a great job he's doing.  Since Jan. 1, 2012, I have had a dozen of my long time clients tell me they are throwing in the towel this year.  That's about 120 jobs there.  Small bizzes that hire local folks in the communities they operate in.  Many of these communities have no other jobs.  Not even gov jobs, the local govs are dumping people too.

I hope all these genius' in charge all burn in hell.  Now.

Tue, 02/21/2012 - 18:51 | 2182546 LookingWithAmazement
LookingWithAmazement's picture

Final stages? Hell no, with the LTRO's the whole game can go on for years. Be honest folks, the ECB/Draghi has saved the world. Without the LTRO, the banks and the euro would have collapsed. Now they're here to stay. No collapse, crisis, meltdown, Armageddon. Told you so. Boring world we live in.

Tue, 02/21/2012 - 19:02 | 2182585 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's funny that the people telling me we needed to bail out the banks and still need to, or else the world would end, call me a doomer.  I'm the one that says we don't need the banks, and to let them fail, and that we will be better off for it.  Then they say the world is going to end if we don't, but I'm the doomer.

People have no logic anymore....logic gone!

Tue, 02/21/2012 - 19:16 | 2182616 Common_Cents22
Common_Cents22's picture

how bout back up the depositors for once, let the speculators learn their lesson and lose a few trillion.   They might think twice next time.

Tue, 02/21/2012 - 19:25 | 2182634 ATM
ATM's picture

depositors can't write the mega campaign donation checks though.

Tue, 02/21/2012 - 19:28 | 2182641 cossack55
cossack55's picture

Any buffoon who has more than just a little working capital in a bank deserves what they receive.

Tue, 02/21/2012 - 18:51 | 2182547 CrashisOptimistic
CrashisOptimistic's picture

haha the Fed added more paper to its vaults last year than the US fiscal deficit.  How does that work?

Oh yeah, MBS buys.

Tue, 02/21/2012 - 18:53 | 2182548 eddiebe
eddiebe's picture

I'll ask it again. Since the Fed is a private consortium of banksters, why would they want to finance the U.S. government especially if they are not getting paid in high interest? The only thing I can come up with is that they will sacrifice the dollar( remember they control the printing presses) and sometime down the road they will want higher interest rates, especially if the dollar currency cow runs out of milk. After all what's in it for them if not profit?    Any ideas on this anyone?

Tue, 02/21/2012 - 18:54 | 2182555 Clint Liquor
Clint Liquor's picture

Maybe they are just greedy and stupid.

Tue, 02/21/2012 - 18:59 | 2182578 engineertheeconomy
engineertheeconomy's picture

Obama, Bernanke and Geitner are one 3 headed snake

Wed, 02/22/2012 - 03:09 | 2183691 John_Coltrane
John_Coltrane's picture

and incompetent. 

"Never invoke conspiracy when incompetence will suffice"  Anonymous Sage

Tue, 02/21/2012 - 18:55 | 2182562 Hobbleknee
Hobbleknee's picture

Because they can buy up everything as it crashes.

Tue, 02/21/2012 - 19:08 | 2182600 tekhneek
tekhneek's picture

The Fed was started by a handful of businessmen with the purpose of inflating away the sheeple's purchasing power over the course of 100 years or so. Who gives a shit about interest rates when you print the money.

The purpose isn't to "stabilize" the economy or "promote fair trade" or whatever the hell you read/hear/thought. The purpose is to confiscate as much wealth as possible into the hands of the few and it's doing that very well.

They don't "finance" the government. Every dollar in existence was borrowed and printed at zero cost. It's one big giant circle-jerk ponzi scheme kept alive so as to further to consolidation of wealth, nothing less, nothing more.

Tue, 02/21/2012 - 21:29 | 2183037 economics1996
economics1996's picture

Yep.  I second that.

Tue, 02/21/2012 - 19:12 | 2182608 dwdollar
dwdollar's picture

I didn't realize the government and banking consortium were two separate entities. Am I missing something?

Tue, 02/21/2012 - 19:22 | 2182627 Common_Cents22
Common_Cents22's picture

A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, "How do I know you won't sting me?" The scorpion says, "Because if I do, I will die too." The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp "Why?" Replies the scorpion: "Its my nature..."


Who cares what the nominal amounts are and return of capital. The financial system is geared on pulling out salary, bonus, and transactional income.

Tue, 02/21/2012 - 23:46 | 2183308 cranky-old-geezer
cranky-old-geezer's picture

 

 

Since the Fed is a private consortium of banksters, why would they want to finance the U.S. government especially if they are not getting paid in high interest?

Because Fed's job is to steal wealth from people and give it to banks ...and some for the government to keep them playing along.

That's it.  The only reason.

It's why interest doesn't matter.  Hell, Fed gives interest profit on treasuries back to the government.

Fed's job isn't to make a profit.  Their job is to steal wealth from everybody.

Same thing in Europe.  ECB's job is to steal wealth from everybody using Euros and give it to banks ...and governments to keep them playing along.

Wed, 02/22/2012 - 15:43 | 2185976 Seer
Seer's picture

It's the last refuge of scoundrels..

These folks' power exists by way of the very existence of the US Govt, and the US Govt exists because of Fiat.

I've said it several times in the past and I'll say it again, my theory is that the Fed will absorb the crap and then blow up, clearly identifying itself as separate from the US govt.  US govt says "holy shit!" and then says "we'll never be suckered for That again!"

If you think about it, would people prefer that China or Russia held all of our debt, OR that our homies (whom will be sacrificed at the alter of Ponzi fiat) did?

NOTE: Most of those "inside" the Fed consortium will shuffle over into govt to take their next positions of power.  Yeah, I know, not much different than today, just that MORE of them will take up this "opportunity" (esp those that are unable to escape with/on their golden parachutes).

Tue, 02/21/2012 - 18:52 | 2182552 Athemos
Athemos's picture

Nice.  Not only will the Fed own all of our mortgages it will own our Government too outright.

Tue, 02/21/2012 - 18:54 | 2182556 eddiebe
eddiebe's picture

They already do, don't they?

Tue, 02/21/2012 - 18:58 | 2182572 Athemos
Athemos's picture

I imagine they will let it all collapse once they own nearly everything.  I dont think they have finished up buying it all yet. 

Tue, 02/21/2012 - 18:59 | 2182573 Athemos
Athemos's picture

Double post

Tue, 02/21/2012 - 21:34 | 2183053 economics1996
economics1996's picture

The fed is the rip off specialist.  The government is the thugs that keep the peasants strait.  The peasants are terrorized by drug laws, IRS, and other "gotcha" crap on the books.

You think I am crazy?  2.3 millions Americans are in jail, 4 times more than China. 

So you have the rest of the nation working and producing for a few elites who try to convince them they are free.  

Hitler could not do this well with his propaganda. 

Tue, 02/21/2012 - 18:55 | 2182559 Clint Liquor
Clint Liquor's picture

They can have them both because both of them are worthless.

Tue, 02/21/2012 - 18:54 | 2182554 Hobbleknee
Hobbleknee's picture

QUESTION:

What is non-financial debt?

Tue, 02/21/2012 - 23:49 | 2183314 cranky-old-geezer
cranky-old-geezer's picture

 

 

Corporate debt outside the financial sector.

Wed, 02/22/2012 - 15:45 | 2185980 Seer
Seer's picture

But... but... when the financial sector owns and controls everything is there really an "outside?"

Tue, 02/21/2012 - 18:56 | 2182564 slackrabbit
slackrabbit's picture

Go New Zealand!

Yep for only 4.1 million people, house hold debt is now in supa-stupid territory 

Tue, 02/21/2012 - 21:11 | 2182993 Tyranny is Love
Tyranny is Love's picture

Why not move to NZ. There's already a lot of high level banker types moving down here (not just buying a condo). Most seem to be buying farmland or a house with land.

Tue, 02/21/2012 - 18:57 | 2182569 engineertheeconomy
engineertheeconomy's picture

the real Terrorist's are the Politicianbankers and their armed thugs

Tue, 02/21/2012 - 19:02 | 2182584 Gamma735
Gamma735's picture

Waves of destruction are and will visited on the world's population to keep the elites in power.   I am no longer a blind believer.   I see the lies and slime that inhabit the halls of power.   I see fear in the elites' eyes.   They fear becoming one of us. 

Tue, 02/21/2012 - 19:07 | 2182597 Dan Conway
Dan Conway's picture

Interesting that Isreal reduced their holdings (smart investor).

France, Spain and Italy increased their holdings (dumb buyers).

India and Mexico reduced their holdings (withhold comment).

I wonder how much Greece bought?

Tue, 02/21/2012 - 19:11 | 2182604 dwdollar
dwdollar's picture

Of course there's no secret deal or anything for this obvious circle jerk. No sir. That would be conspiratorial and tin foil hat-ish.

Tue, 02/21/2012 - 19:11 | 2182606 New American Re...
New American Revolution's picture

And gold is taking off.....

Tue, 02/21/2012 - 19:16 | 2182614 chump666
chump666's picture

Over to you OWS part 2.

Obama time for you to sweat. 

Tue, 02/21/2012 - 19:19 | 2182617 Everybodys All ...
Everybodys All American's picture

Who is going to downgrade the US debt next? Fitch, Moody's, or S&P. I'm actually betting S&P will downgrade again before the other two. 21 days to add another percent is unreal.

You know that Bernanke is boxed in with his stupid monetary policy. What an idiot for putting the US at such risk. I believe the only choice he has is to begin to normalize rates now or I think we we are screwed. Even though you can imagine what just a percent increase in the interest rates on America's debt would not be good. Does everyone still think this guy is the smartest man in the room and should be running our central bank.

If we don't start growing here pretty soon life is going to get real ugly in America.

Tue, 02/21/2012 - 19:28 | 2182640 dwdollar
dwdollar's picture

Economies don't grow in a climate of fear.

Tue, 02/21/2012 - 19:58 | 2182753 lunaticfringe
lunaticfringe's picture

I agree EA. You must be an eternal optimist. You actually think we can manufacture the capacity to put this debt to rest. You sir, see the glass- all the way full.

Tue, 02/21/2012 - 21:43 | 2183069 Everybodys All ...
Everybodys All American's picture

Growth is our only chance at getting this turned around. During WWII our debt was this big and is the only time frame comparable for dbt/gdp. Am I an optimist? Yes. But I'm afraid only if Bernanke is replaced with someone like Paul Volcker or me. Raising rates is necessary to restore sanity to all markets and reign in US fiscal spending.

What Bernanke has done is allow Obama to spend like a fool.

Tue, 02/21/2012 - 23:55 | 2183328 cranky-old-geezer
cranky-old-geezer's picture

 

 

Sorry, but no way can production (and taxes) grow enough to pay off the colossal debt.

Tue, 02/21/2012 - 20:55 | 2182949 blueridgeviews
blueridgeviews's picture

We are well beyond normalizing rates. We are screwed beyond anyone here's imagination. Listening to you folk talk about hedging this or that reminds me of the orchestra playing on while the Titanic is sinking.

Tue, 02/21/2012 - 21:16 | 2183007 Calmyourself
Calmyourself's picture

Yeah, normalizing rates that was pretty funny.. Run jsut a few scenarios on normalizing rates .. Bye medicare, medicaid, defense budget, food stamps, AFDC......

Normalizing rates is no longer a POSSIBILITY, get this straight that cannot happen..

Wed, 02/22/2012 - 15:54 | 2186025 Seer
Seer's picture

"I believe the only choice he has is to begin to normalize rates now or I think we we are screwed."

NO ONE or entity should be responsible for setting rates!

"If we don't start growing here pretty soon life is going to get real ugly in America."

What rate are you wanting?  2%? 3%?  Didn't you know (said in the voice of Dr. Albert Bartlett) that 2% growth means everything DOUBLES in a mere 35 years?  23 years for 3%.  I'm guessing that most folks would spout out some "comforting" number like 7%, a DOUBLING in ONLY TEN YEARS!

DOUBLING means that everything around you DOUBLES!  Consume twice as much oil and all other natural resources.  At some point the FINITE planet won't be able to respond to your/our demands for GROWTH.  What then?  Hate to tell you this but... when Mother Nature tells us it's time for growth to stop, That is when things are truly going to get ugly!

Tue, 02/21/2012 - 19:17 | 2182618 Tsar Pointless
Tsar Pointless's picture

Why, I just KNEW there was a reason I felt all giddy inside - like a little schoolboy playing "sword fight" in the boys' locker room after gym class.

Today is a glorious day indeed in the anals (yes, I meant that spelling) of Amerikkkan hiss-tory. The bread is sliced and on the table, and the circuses, they are a-plenty!

Eat up, fellow proles! And just wwait - that fat lady can REALLY belt 'em out!

Tue, 02/21/2012 - 19:18 | 2182620 Eisenhorn
Eisenhorn's picture

Part of me sees this and thinks, logically, that US paper and fiat in general is doomed.

But another part of me says what rational thinker would want to bet on Russia and China versus the power elites of the West?

Why would they let it all collapse?  Why would they let their dreams of Empire go down the crapper?

When it gets to that point, they just declare war on Russia, China and whoever else they feel like and voila!  System reboot.

Gold and Silver are smart, but I don't think any of us truly understand just how powerful the banking cartel of the west is, nor the shape of the future.

Just thinking out loud.

Tue, 02/21/2012 - 19:23 | 2182632 Clint Liquor
Clint Liquor's picture

 

When it gets to that point, they just declare war on Russia, China and whoever else they feel like and voila! System reboot.

You do know that Russia and China have Nuclear Weapons, right?

Tue, 02/21/2012 - 19:27 | 2182639 Eisenhorn
Eisenhorn's picture

Sure, but will they use them?  After all MAD still applies.

You don't start a war of conquest with them anyway.  You go to war until they run out of money.  The goal is bankruptcy....and frankly, so is the predicate.

Tue, 02/21/2012 - 19:39 | 2182647 dwdollar
dwdollar's picture

I'm not sure America has the manufacturing capacity to quickly replace it's conventional weapons if heavy losses are inflicted. Better pray the blitzkreig knocks them out in the first 6 months. Also not sure where electronic fiat would be able to procure weapons. Aliens maybe...

Tue, 02/21/2012 - 19:50 | 2182712 DosZap
DosZap's picture

dwdollar

There would have to be a DRAFT.

Our military is dead meat.

They have been non stop fighting and doing multiple tours for the past ten years.

We are tired to the bone as far as boots are concerned.

By Conventional I assume you mean all but nuclear?.

No problem, we have folks who can kick out Patriots,Tomahawks and whatever we need post haste.

I am more concerned we cannot supply small arms, and the stuff to make them go bang,as all the propellant companies are gone, offshore, and owned by foreigners.Primers, brass, and bullets are of no use without powder.

Privi Partizan is taking over the ball ammo supply for the 7.62x51 platforms.

And their Serbians.

IMHO,If we wanted to we could stop Iran in their tracks, as well as any other military using any electronic flyers, IF we got EMP's on them fast enough.

 

Wed, 02/22/2012 - 16:05 | 2186083 Seer
Seer's picture

Another person who thinks that wars are winnable...

"IMHO,If we wanted to we could stop Iran in their tracks"

Where the fuck did Iran enter into all of this?  Further, just what are their "tracks?"

It's resource consumption, not "spending" (some abstract shit) is what eventually determines the fates of countries.  Each country will ultimately reduce its exports in order to use their own resources for themselves (yeah, selfish!): peak exports, bitchez!

The ONLY reason that the US gives a flying fuck about these other countries is that it wishes to keep their "markets" open for plundering.  Fuck, do people really need to be told this shit?  Open a fucking history book..

If you cannot be sustainable you die! (well, on a long enough time line...)

The US can't even control Afghanistan for shit's sake!  You know why?  Supply lines!  Always about the ability to maintain supply lines.  That far away, such as would be with Russia, China, Iran et al, writing's on the wall here.

All it takes is for power-mongers with the ability to say "push it" to end nearly everything we see.  And, if "god" is on your side, well, you have the authority to (as did Bush when deciding to invade Iraq) take out god's villains.  You're the chosen ones so you KNOW that god will see to it that YOU live: just believe!

Tue, 02/21/2012 - 19:34 | 2182651 Clint Liquor
Clint Liquor's picture

 

Sure, but will they use them?

Putin? Fuckin' A!

Tue, 02/21/2012 - 20:12 | 2182797 DosZap
DosZap's picture

Eisenhorn

Sure, but will they use them?.......IMHO,Putin will do whatever he deems neccessary, Ex KGB, bad ass.

You go to war until they run out of money.

( Now thats a good one, they have more REAL finacial  reserves than we do we have none, we are dead broke.We just print............fiat paper.

Tue, 02/21/2012 - 21:16 | 2183005 blueridgeviews
blueridgeviews's picture

MAD only works when you have missles on the ready. Obama wants to take our missiles down to 300 as of last week. Now that's mad.

Wed, 02/22/2012 - 16:46 | 2186234 Seer
Seer's picture

"our missles?"  YOU got fucking missles?

Fucking idiot!  When this shit starts decaying, which it will, then I hope that you're right there alongside YOUR missles.

Have fucking nice day, moron!

Tue, 02/21/2012 - 19:47 | 2182702 seek
seek's picture

Fixes the long-term US entitlement payments issue in one easy step.

Wed, 02/22/2012 - 00:02 | 2183338 cranky-old-geezer
cranky-old-geezer's picture

 

 

Why would they let it all collapse?  Why would they let their dreams of Empire go down the crapper?

Hyperinflation isn't collapse ...at least in their minds.

The better question to ask is why would they want to grind everybody down to poverty (via hyperinflation)?  Why would they want to destroy the economy?

I don't know the answer to that.  I just know that's what they're doing.

Wed, 02/22/2012 - 00:28 | 2183401 BeerBrewer09
BeerBrewer09's picture

To achieve nearly full control over resources that are precious and dwindling under the massive overpopulation of this planet. Let's allow all the peons to feast upon each other and, of course, side show governments, to quench their bloodlust while we run off with all the gold, oil, land, food, water and all other precious commodities in the process. If there is some sort of economy instituted afterwards? shit, it'll still be in our favor, because it will probably be created by us, the elites.

Wed, 02/22/2012 - 09:00 | 2184228 Miss Expectations
Miss Expectations's picture

Here's a map.  All "public" lands.  Seeing red?

http://robbishop.house.gov/UploadedFiles/All_US_Public_Lands.jpg

Wed, 02/22/2012 - 16:56 | 2186269 Seer
Seer's picture

"I don't know the answer to that.  I just know that's what they're doing."

The assumption is that they have any real say in the matter.

Rocking a boat isn't what TPTB want.  And no, it's not some grand conspiracy to bring about <insert you [un]favorite ideology here>.

TPTB are at the helm of a ship that's out of power and being pulled down to the earth by earth's gravity.

At first they thought they could tweak some levers and push some buttons and the power would come back on.  Now it's clear that it ain't.  So... what's the next OBVIOUS human reaction?  Start bailing!  Afghanistan got tossed overboard: in the way of access to power (pipeline route).  Iraq got tossed: ooh!  power! (crap!  humans there who don't like being shit on!)  US citizens... NDAA...  Austerity!  The load MUST be lightened up, you know, for the good of the "Homeland."

I don't think for a minute that TPTB don't grasp the consequences of infinite thinking colliding with the finite planet.  It's hidden in all wars...  This time, however, it IS different, we're out of bullets, er, a, we're out of meaningful caches of resources (plus no longer able to operate with little competition for said resources- China).

Tue, 02/21/2012 - 19:22 | 2182625 VyseLegendaire
VyseLegendaire's picture

Fun times.

Tue, 02/21/2012 - 19:24 | 2182633 Winston Churchill
Winston Churchill's picture

There is a major problem with these charts.

GNP and debt is not worked out the same way in every country.

That said ,implosion is close for all.

Gold is money,everything else is debt.

Tue, 02/21/2012 - 19:26 | 2182636 Scroto Gaggins
Scroto Gaggins's picture

What is our real debt?  What is our real GDP?  Can anyone answer that?

Tue, 02/21/2012 - 19:26 | 2182637 Scroto Gaggins
Scroto Gaggins's picture

What is our real debt?  What is our real GDP?  Can anyone answer that?

Tue, 02/21/2012 - 19:34 | 2182648 DosZap
DosZap's picture

Scroto Gaggins

Scroto ,

no one knows for sure.

Before this all started at its current pace, we were at approx 13T, w/ 160T in unfunded laibilites.( and this was not even considering Derivatives debt possibilites).

Our GDP in good times was approx 12-14T+/-

Since Bernie has started handing out QE unamed to the EU, and God only knows who else, it's impossible for anyone to know.

I doubt HE even has a clue, or cares.

WORLD exposure to Derivates last I read was in excess of  600 Trillion......................just for DERIVATIVES.

World GDP before recessions was est @ 60 Trillion.

 

Tue, 02/21/2012 - 19:43 | 2182685 BLOTTO
BLOTTO's picture

How does one not ask (aside from ZedHeds and those in the know) how in the fuck do you than even begin to pay off the principal debt?

When do you tackle that actual problem - the debt itself?

Tue, 02/21/2012 - 19:56 | 2182748 DosZap
DosZap's picture

BLOTTO

Thats the point of Tylers post, when you get to 100% of your GDP, your past the point of no return.The austerity required, and moral will needed to stop spending, and cut bennies is not going to happen here............period.

Our ENTIRE Tax Revenues ( 12% more than expected), 100% of it will barely pay the interest due on principal  where we are now.

Tue, 02/21/2012 - 20:32 | 2182861 Taint Boil
Taint Boil's picture

 

 

.....$32 billion in 2 Year Bonds

Thats about half the US corn production for 2011 (page 9). Wow, sure got a lot of people over there ... gladly trade you some food for the debt. Wouldn't want your people getting "hungry" now would we.

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