US Debt/GDP Hits Post WWII High Of 101.5% [Archive] - Glock Talk

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Ruble Noon
07-02-2012, 20:46
http://www.zerohedge.com/news/us-closes-june-1585636721432444-federal-debt-us-debtgdp-hits-post-wwii-high-1015

dsa1115
07-02-2012, 21:00
Amazingly that figure doesn't even include all the unfunded liabilities. If you want to include unfunded liabilities, multiply your number X10.

beforeobamabans
07-02-2012, 21:29
It will be interesting to watch as the most predictable crash in the history of the world occurs and the sheeple and their representatives run around in a panic as if they had no idea it was coming. The only good thing about it is I will make a lot of money in the markets but that money may not be worth much.

Cavalry Doc
07-02-2012, 21:57
It will be interesting to watch as the most predictable crash in the history of the world occurs and the sheeple and their representatives run around in a panic as if they had no idea it was coming. The only good thing about it is I will make a lot of money in the markets but that money may not be worth much.

Been stuffing money into securities since the last crash, and I can switch them into the stocks after the crash. Timing the bottom is the fun part. Buy low, sell high. :dunno:

engineer151515
07-02-2012, 22:44
I don't think the future currency crisis is going to be the big score opportunity. Plus, if the banking crisis was any indication, it will domino so quickly that you will have garbage currency frozen in accounts by the .govt before you can say "jack squat".

Think Argentina and the global currency equivalent of nuclear winter.

But don't fret. The UN will gladly replace your frozen dollar assets for new global script for something on the order of 3 cents on the dollar. Or less.

You can model it like nuclear war. Come as you are. What you have in hard assets (not cash) after the boom is what you've got to work with.

snerd
07-03-2012, 00:27
http://www.canadafreepress.com/images/uploads/caruba070212-1.jpg

barbedwiresmile
07-03-2012, 03:57
It will be interesting to watch as the most predictable crash in the history of the world occurs and the sheeple and their representatives run around in a panic as if they had no idea it was coming.

They know exactly what's coming. Hence the flurry of recent internal control legislation. While they may appear incompetent as they wave the their red and blue flags, they are in fact extremely competent. After all, they've facilitated the greatest heist in history and insulated themselves from the repercussions.

The only good thing about it is I will make a lot of money in the markets but that money may not be worth much.

My friend, I would strongly encourage you to hold 'stuff' rather than paper. An inflated, irrational, insider's, algo-driven market will be unforgiving to the individual investor.

barbedwiresmile
07-03-2012, 04:10
I always thought ZH had the best comments section, especially for pure sarcastic comedy gold. This one, however, is succinct and sums the mess up:

But hey ... who cares about the debt when we don't even bother to have national budgets anymore.

beforeobamabans
07-03-2012, 04:50
My friend, I would strongly encourage you to hold 'stuff' rather than paper. An inflated, irrational, insider's, algo-driven market will be unforgiving to the individual investor.
We can only hoard so much "stuff" for a possible future barter economy. If it comes to that, there should be a transition period where cash can be put to work.

There are some credible commentators who see deflation, not inflation, as the ultimate outworking of this crisis. There is already some significant evidence to this hypothesis. If it goes this way, cash will become more valuable, commodities less.

cowboy1964
07-03-2012, 10:55
There are some credible commentators who see deflation, not inflation, as the ultimate outworking of this crisis. There is already some significant evidence to this hypothesis. If it goes this way, cash will become more valuable, commodities less.

I don't know any of the deflationary commentators are stating that deflation will be the ultimate end of this. Any deflation (if it even occurs) will be very short-lived. Then massive inflation, if not outright hyperinflation.

MZBKA
07-03-2012, 18:42
Japan's debt to gdp ratio is 200%. The debt is a problem, but those who swear the end is near should join their friends with same sign on the street corner.

jeanderson
07-03-2012, 18:54
Amazingly that figure doesn't even include all the unfunded liabilities. If you want to include unfunded liabilities, multiply your number X10.

EXACTLY!!!! So many people don't get this. We are so close to going over the edge, if we're not there already.

THIS DOES NOT HAVE A HAPPY ENDING.

jeanderson
07-03-2012, 18:58
Japan's debt to gdp ratio is 200%. The debt is a problem, but those who swear the end is near should join their friends with same sign on the street corner.

What's the unfunded long term liabilities in Japan? As dsa1115 points out, that would put the U. S. figure at 1000%!

cowboy1964
07-03-2012, 20:30
I don't get Japan. That much debt for this long? Yet no one ever talks about that.

I just don't get it.

Jonesee
07-03-2012, 20:39
I don't know any of the deflationary commentators are stating that deflation will be the ultimate end of this. Any deflation (if it even occurs) will be very short-lived. Then massive inflation, if not outright hyperinflation.


One of the Fed's fears is spiralling stagflation.

We had it during the Nixon/Carter years and if I remember correctly Volker was Fed Chairman then. No economic growth, sky high interest rates, high unemployment, it was a very tough time.

Nixon fought it by imposing wage and price controls and Carter fought it with a button. Remember, the button said "WIN" and meant (whip inflation now).

I like what we have now a lot more than what we had then.

I'm not trying to minimize what people are going through right now. By my memory, though it was rougher then.

427
07-03-2012, 21:07
Thanks, Helicopter Ben!

beforeobamabans
07-04-2012, 05:46
I don't know any of the deflationary commentators are stating that deflation will be the ultimate end of this. Any deflation (if it even occurs) will be very short-lived. Then massive inflation, if not outright hyperinflation.

Dent calls for a decade of deflation until the demographics turn around in the early 20's as the baby boomer echo enters their peak spending years.

You say "if it occurs" but it is already here. The housing market is certainly a deflationary spiral, and it's going to get worse. Systemic high unemployment (which is really around 14%) will depress wages and salaries. Ask a new college grad what the job market looks like. My son recently graduated from law school and after looking for a year finally took a job at about half of what he was expecting. That's deflation, when dollars buy you more value than they used to. You're just now watching the beginning of the commodity price collapse-oil is headed back below $50/bbl. I could go on. All lot of people deny the evidence right before their eyes. Our generation has never experienced deflation so governments and individuals don't know how to deal with it.

ChuteTheMall
07-04-2012, 06:10
The WIN button was under Ford, not Nixon.

In 1972, Nixon won re-election because of many reasons, but unemployment was 5.9%, inflation was 4.3%, the total national debt was under half a trillion, and total federal spending was $230 billion. This soon after putting a man on the moon and while fighting a war in Vietnam.

After Nixon was re-elected, the media and the democrats began a silent coup to reverse the choice of the voters, and the combination of the antiwar movement with Watergate led to the extreme leftist McGovern wing taking over the DNC, which it still controls today. They also control education and thus revisionist history.

http://www.1970sflashback.com/1972/economy.asp


http://i48.tinypic.com/2wdx7pk.jpg

In 1976, Carter was elected, and by 1979 inflation was 13.3%, total annual federal spending was over $500 billion and the total accumulated national debt was $830 billion, which is about half of an Obama annual deficit.

This tripling of the inflation rate and the doubling of the national debt led us to the era of Reagan.
:elephant:

beforeobamabans
07-04-2012, 06:21
This tripling of the inflation rate and the doubling of the national debt led us to the era of Reagan.
:elephant:
It is often said that it took a Carter to get us to Reagan.

Now we have the even worse Obama but it gives us Romney?!?

What happened?

aircarver
07-04-2012, 06:44
Reagan's only come around once a century .... :frown:

.

ChuteTheMall
07-04-2012, 06:48
It is often said that it took a Carter to get us to Reagan.

Now we have the even worse Obama but it gives us Romney?!?

What happened?

Don't forget the opposition to Reagan was strong, that's why he lost the primary in 1976 and in 1980 even primary opponent George H.W. Bush claimed Reagan's trickle-down proposals were "Voo-Doo Economics."

Before Reagan became President, he was already quite openly mocked and despised by many, and I don't recall Romney co-starring with a chimp as in "Bedtime for Bonzo."

I'm not claiming Romney is the next Reagan, but I am expecting great improvements if he replaces Obama.


You unleash the dogs
of a grade-B movie star governor's war
While you sit in the dark -
insane with the fear of dying
--Mau Mau (Amerikon), Jefferson Starship, 1970

pugman
07-04-2012, 06:52
Amazingly that figure doesn't even include all the unfunded liabilities. If you want to include unfunded liabilities, multiply your number X10.

A recent article last year written by Laurence Kotlikoff put the number at $211 trillion over the next thirty years. When people start throwing numbers around like this they might as well start using the word Gazillion.

They know exactly what's coming. Hence the flurry of recent internal control legislation. While they may appear incompetent as they wave the their red and blue flags, they are in fact extremely competent. After all, they've facilitated the greatest heist in history and insulated themselves from the repercussions.

My friend, I would strongly encourage you to hold 'stuff' rather than paper. An inflated, irrational, insider's, algo-driven market will be unforgiving to the individual investor.

This. The financial markets are no longer controled by such trivial things like profit margins, balance sheets or even actual value. What drives the market today is fear or greed. I understand and adhere to the "Greed is Good" philosophy; however greed driven by stupidity is destructive.

My son recently graduated from law school and after looking for a year finally took a job at about half of what he was expecting.

I don't know what your son was expecting but I can share my recent recruiting experience.

Attending job fairs at such places as Marquette University in Milwaukee (an expensive school) and UW-Madison I talk to students with good grades (3.2 or higher averages), some extra activities (but no athletes) and most of their expectations are shall we say "excessive"

$90,000 to start? Some actually asked if we provided company vehicles...for auditors? At the end of the fairs, recruiters and I get together and surmise strong candidates and swap stories of what people said. Students simply don't realize this is a buyer's market for the most part - some fairs we collect 500 or more resumes for 2-3 jobs.

It is often said that it took a Carter to get us to Reagan.

Now we have the even worse Obama but it gives us Romney?!?

What happened?

I hear the same Carter Reagan thing all the time.

What happened? It took a Bush to get us an Obama

And sorry, Willard isn't the solution.

People don't realize how much a house of cards the Fed is now. The system will fail; it simply must to reset. You can't have potential obligations in the next 30 years of $150-$211 Trillion dollars and income around $80 trillion and expect to survive. Their only courses of action left right now are massive cuts in benefits or tax rates to double - either is a death sentence for politicans which means they won't act.

beforeobamabans
07-04-2012, 07:23
People don't realize how much a house of cards the Fed is now. The system will fail; it simply must to reset. You can't have potential obligations in the next 30 years of $150-$211 Trillion dollars and income around $80 trillion and expect to survive. Their only courses of action left right now are massive cuts in benefits or tax rates to double - either is a death sentence for politicans which means they won't act.
Agree totally with this. Our financial problems have become systemic, which is an important issue to understand. "Moderate" adjustments may delay the inevitable (i.e., 'kick the can down the road') but they will not solve anything. This is no different than individual debt--the rising interest payments will consume the country if principle is not paid down. Whether nation or individual, one cannot cure debt with more debt. The Fed has delayed the day of reckoning only because they can print money. Of course, this just ultimately makes the problem harder to solve and the cure much more severe.

ChuteTheMall
07-04-2012, 07:34
"Moderate" adjustments may delay the inevitable (i.e., 'kick the can down the road') but they will not solve anything.

It's been going on for nearly half a century so far.

Having experienced high inflation, I absolutely prefer lower inflation, although I've done well enough under both. YMMV.

Disaster delayed is, um, disaster postponed? Prevented?

:dunno:

barbedwiresmile
07-04-2012, 08:00
Interesting conversation.



There are some credible commentators who see deflation, not inflation, as the ultimate outworking of this crisis.

I am actually a deflationist myself when it comes to this topic. However, I see the end result as inflationary depression (rather than hyperinflation or 30's style deflationary depression). There is a significant difference, as you know, particularly as it regards the effect on paper holdings. The central bank will continue its attempts to reinflate, but these attempts will continue to fail. And for the same reasons they've been failing.

There is already some significant evidence to this hypothesis.

I would go further and state that it isn't a hypothesis. We are in a deflationary economy. Only those who confuse price inflation with monetary inflation would argue otherwise.

If it goes this way, cash will become more valuable, commodities less.

Be very careful here, my friend. The paper markets are outrageously manipulated right now and, as we find with the LIBOR scandal, have been for some time. This includes equities, capital markets, and paper commodities (COMEX, etc). Just ask those former MF investors who have to listen to Corzine be referred to as 'the honorable'. Algo driven and highly manipulated. Be careful. When contractual rule of law crumbles, all other law follows and we default to law of rule (which is where we are at today).

beforeobamabans
07-04-2012, 08:42
Interesting conversation.

Be very careful here, my friend. The paper markets are outrageously manipulated right now and, as we find with the LIBOR scandal, have been for some time. This includes equities, capital markets, and paper commodities (COMEX, etc). Just ask those former MF investors who have to listen to Corzine be referred to as 'the honorable'. Algo driven and highly manipulated. Be careful. When contractual rule of law crumbles, all other law follows and we default to law of rule (which is where we are at today).

I always try to be careful, LOL.

When I said "cash", I wasn't referring to any market but rather cash on hand, in the matress or maybe in an FDIC protected account, although at some point, this will become risky too. We are used to an inflationary economy where prices continuously rise making cash worth less. This encourages a "buy now" mentally and has crippled our savings rate. Deflation, not surprisingly, calls for exactly the opposite, that is conserve your cash because it can buy more tomorrow, eliminate debt because the principle is increasing in value, and save more. Guess what these laws of physics mean for an economy based on 70% consumption?

When you truly look at the big picture of where we're headed, it is frightening indeed!

evlbruce
07-04-2012, 09:04
I don't get Japan. That much debt for this long? Yet no one ever talks about that.

I just don't get it.

Japan is circling the point of no return, it just seems that foreign investors and international economists are the only ones truly concerned.

I'd chalk it up to their culture of trusting the state to provide good governance.

pugman
07-04-2012, 11:28
It's been going on for nearly half a century so far.

Having experienced high inflation, I absolutely prefer lower inflation, although I've done well enough under both. YMMV.

Disaster delayed is, um, disaster postponed? Prevented?

:dunno:

72 years to be exact. The debt has increased every decade since 1940. The ramp up really started in the 70's. The problem is what used to take a decade to add to the debt now takes 6 months. The public debt and entitlement programs are just like credit cards: you can max a card in a month and take 5 years to pay it off.

During inflation, deflation, stagnation...anything one thing has stayed current: the fed spends more money, runs up more debt and is simply running out of "wiggle room." Politicans on both sides of the aisle haven't been responsible mangers of this country for decades.

Every disaster has a starting point - the gravy train will end at some point.

I can run simple mortgage like numbers and show if 1) the budget was balanced tomorrow 2) taxes increased 3) interest rates on all public debt were reduced to 0% 4) entitlement programs were frozen we could dig ourselves out in about 50 years. Now enter reality.

What took 50 years to charge up could take hundreds of years to pay off. Our Republic won't last this long.