I'm just pulling numbers out of my ass, but imvho we might make it another year or so tops. Those mortgage reset charts floating around, show we're at a relative low tide now, but there is another avalanche coming 2010 or so. On top of CRE and the credit cards.
We need to get you inside the Congress and the Treasury Dept like Max Headroom on every one of their terminals with this message. Outstanding. Thing is, I'm convinced these folks running the system (financial oligarchy so to speak) are in effect financial sociopaths, and sociopaths never figure they will get caught. Ergo, I am not optimistic they will voluntarily change one damn bit of current financial policy. Pitchforks and Torches it will take.
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It's a toss up. It is the Rule of Law that transforms assets into money: Martin Armstrong Math IS: Karl Denninger
Forgot to add, and that was at GDP of 5% and debt growth of 5%. Debt growth now of in excess of 8% and in that environment, GDP at best, half of 5%, ..... cuts the time frame by 2/3rds. We don't have 20 years, I'd wager we have less than 6. Adios Social Security!
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It's a toss up. It is the Rule of Law that transforms assets into money: Martin Armstrong Math IS: Karl Denninger
No, debt growth is at the ACTUAL average growth since the 1950s, which is 8.7ish% (stated on the chart.) This is reasonably consistent with the last decade as well.
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"The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
In the text you state that both start at $10,000 - I suspect you mean $1,000.
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The Government Inequality: Total Wealth before Government Intervention > Total Wealth after Government Intervention
“Those who have faith and confidence in the country and its ability to come back will profit by their foresight. This has also been the case over the past half century.” - WSJ 3rd Sept 1930
My-oh-my I think we’re on the precipice. 1.5 million people peaceful protest in DC, ACORN / SEIU scandals with no MSM coverage? Geithner and others?
I voted for Obama because there seemed to be no other choice - give me a choice America. or, if there is no choice what a ****ing joke we are. I was going to write some more but am at a loss for words.
Yet another righteous plea from Karl and I applaud him for doing it. Perhaps 20 years hence people will access the Market Ticker and acknowledge that Karl and a few others tried to sound the alarm, but I think everyone reading this also will acknowledge that the clowns in DC will not awaken in time. This mess is about to get a whole lot worse and the most important question for all of us is what to do to preserve our assets and God for bid, our way of life.
From what I have read, Karl is not a big believer in gold etc but I do not see many alternatives as advice to follow in the event horizon scenario. I welcome others' feedback.
I say that when the debt gets large enough the govt will be forced to cut spending and raise revenue. When they do, whoever is in charge will say that it is not their fault but that it has to be done. Pensions, Social Security, Medicare will be cut cut cut.
The big banks will fail, but not collapse. Their debt will be incorporated into the Federal debt as they are nationalized. You know what is going to really be bad though is that they will somehow manage to pay off the TARP funds and then fail a few months later. The FDIC will have to do something drastic like convert all of BofA and City deposits into Treasury Direct accounts.
The Fed will have to do everything they can to stabilize the Federal Reserve Notes. If people lose faith in the currency then barter will cause the govt to lose even more revenue.
Our country will still survive though, it will just be a has been, no longer number one.
Such an outcome would destroy our economy, result in almost everyone who is currently middle class and has any debt whatsoever being rendered penniless, unemployment could easily reach 30% or more and the government would be unable to fund any of its social programs, including Social Security and Medicare.
Bernake's "recession likely over" call and The Joker's endless media parade make it clear that this is their chosen path.
It is sad to watch.
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The carry trade enhancement from ZIRP is a subsidy for credit losses by banks that comes out of the pockets of savers.
Sept. 16 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said he’s worried that lawmakers will hamper U.S. central bank efforts to rein in its monetary stimulus, and that inflation might “swamp” the bond market.
“It’s the politics in the United States that worries me, whether the Congress will basically feel comfortable” with the Fed withdrawing its stimulus, Greenspan said in a broadcast to Tokyo clients of Deutsche Bank Securities Inc. today. He later said that “if inflation rears its head, it will swamp long-term markets,” referring to bonds.
With U.S. unemployment running at a quarter-century high, the Fed may face resistance from lawmakers as it tries to promote price stability by raising its benchmark interest rate from near zero. The jobless rate reached 9.7 percent last month and employers have cut almost 7 million jobs, the biggest drop in any recession since World War II.
The former Fed chief, who counts Deutsche Bank among his clients, also warned that the U.S. must rein in its “very dangerous” level of debt, citing the threat of increased issuance of Treasuries undermining the dollar.
Greenspan, speaking via videoconference from Washington, indicated that successor Ben S. Bernanke and his fellow Fed policy makers have until next year before inflation will present a danger.
Inflation Outlook
“We’ve got worldwide disinflation in train and it will continue for a short while,” he said. “Our model says that by the early months of next year the rate of inflation will fall below 1 percent on an annual rate” before increasing.
American consumer prices fell 1.7 percent in August from a year earlier, according to the median forecast in a Bloomberg News survey of economists before the Labor Department reports the figure today. Prices fell 2.1 percent in July, the most since Harry S. Truman was president in 1950. Investors use the figures to gauge inflation, which erodes bonds’ fixed returns.
Benchmark 10-year Treasury notes yielded 3.44 percent as of 12:21 p.m. in Tokyo, according to data compiled by Bloomberg. They averaged 3.15 percent so far in 2009, compared with 4.16 percent the past five years. The dollar was at $1.4673 per euro, compared with its record low of $1.6038 reached in July 2008.
Greenspan said that if there were a significant issuance of Treasury securities that increased the national debt, “there would be of necessity downward pressure on the dollar.” At the same time, he said, “you can’t say that without saying what the counterparty currency would be.”
‘Very Dangerous’
Greenspan said one threat to Treasuries is the “very dangerous” level of U.S. national debt. “We’ve got to confront that issue immediately,” he said.
The nonpartisan Congressional Budget Office said last month that deficits between 2010 and 2019 will total $7.1 trillion. Those shortfalls, which are financed with borrowed money that’s tacked onto the national debt, would drive the debt up to 68 percent of the nation’s economy by 2019, from the current 54 percent, CBO said.
“The next six months seem reasonably easy to anticipate: no inflation, good economic growth,” Greenspan said. “Things are turning and it looks good for the near term.”
Greenspan said last month the U.S. economy could resume growth with a 2.5 percent expansion in the current quarter, while adding there was still a risk of a “second wave down.”
Growth Outlook
Economists surveyed by Bloomberg News this month put the odds of a double-dip recession in the next 12 months at 25 percent, up from 20 percent in August. The economy will expand at a 2.9 percent annual rate in July through September, according to the median of 61 estimates in the survey taken Sept. 3 to Sept. 10.
“This recession will not be over until home prices stabilize at a minimum,” Greenspan said. “The evidence suggests that we’re getting there, finally.”
Home prices in 20 U.S. cities fell in June at a slower pace than forecast, a sign that the real-estate crisis is dissipating. The S&P/Case-Shiller home-price index advanced 2.9 percent in the second quarter from the previous three months, the first increase since 2006 and the biggest in almost four years, according to an Aug. 25 report.
Bernanke yesterday said the worst U.S. recession since the 1930s has probably ended. At the same time, he warned that growth may not be strong enough to immediately reduce the unemployment rate.
Bernanke’s Call
“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time,” Bernanke said at the Brookings Institution in Washington, responding to questions after a speech.
The remarks were the Fed chief’s most explicit yet that the contraction that began in December 2007 is over. They echoed comments this week by San Francisco Fed President Janet Yellen and followed a report yesterday showing retail sales rose last month by the most in three years, adding to evidence of a recovery.
Greenspan also weighed in on the debate over a regulator of risks across the financial system as Congress prepares the biggest overhaul of U.S. financial regulations since the 1930s, when the Fed was reorganized. The U.S. Treasury has proposed giving the Fed greater authority over the capital, liquidity, and risk-management standards of the largest financial firms.
Congressional leaders haven’t supported that proposal and are considering giving broader authority to a council of regulators.
“I’m not in favor of a systemic-risk regulator because I don’t think it’s feasible,” Greenspan said. “I think we have to recognize that there are limits to what we can do.”
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What is best in life? Conan: To crush your enemies, see them driven before you, and to hear the lamentation of their women.
It's been a few months since I blasted a ticker to my entire address book. This one conveys the situation with clarity and urgency. I like the video/text combination. Here goes. Family and friends, THINK!!!
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"Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like." — Will Rogers
Great ticker. I was wondering if a solution presented at minute 7:30 (skip to that) is possible from this Youtube video. Then there's no need to default to reset the system as we make the debt worthless.
The Dynamic of the Economic System Collapse
He said the move can be parallel.
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Lucky Lee * Bulls and bears will be slaughtered, but pigs will be bailed out.
I am with you KD. But my problem is this.....Investors can entrap themselves by interacting with others with the same belief. This reinforcement lead to delusion. If anyone traded off it they would have been dead wrong the last 6 months. Its the elephant in the room. I am scratching my head and still believe in your comments but I just missed out on the biggest run ever.
A chicken in every pot and a banker from every post!
Smartmoney.....
The trend is your friend. Even Karl has many times told people he was long stocks for a trade. When you are trading against a government freight train, there is no reason to try and short the market, in the end you are playing into their hands. Play the trend until it does not work. I don't trade any more, so it is easy for me to say. I bet I would have lost a pretty penny if I still was doing it too.
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Hopium: hope filled delirium preached by the White House and Swallowed whole by the American Sheeple. Kool-Aide drinkers of the world unite - America needs you more now than ever before... "We saved the world from disaster" - Ben Bernanke - Jackson Hole 08/21/2009
Bezzle
Posts: 8095
Incept: 2009-08-02
Have YOU starved a Monkey today?
Quote:
The Fed will have to do everything they can to stabilize the Federal Reserve Notes. If people lose faith in the currency then barter will cause the govt to lose even more revenue.
The day is drawing closer and closer to an all-out mass move by the citizenry to the gray and black-markets, and an out-and-out tax-revolt.
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Why would you try to stop this? A bond-market dislocation puts an instant stop to all the bull****. It is the only limiting factor left in this interventionist madness. It is an almost holy event. -- Christian Gustafson
Karl, I was wondering why you only mention the GND number and not also the debt outstanding that is excluded from the GND calculation such as the leverage contained in credit derivative instruments, etc etc, and some of the increases in the underfunded liabilities of the federal government when you are illustrating this point.
I mean that makes the devastation of the issue you are trying to bring to everyone's attention that much more poignant.
I figure there must be a reason why you don't think this is relevant. Can you explain?
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