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Peter1469
12-28-2012, 08:45 PM
Link (http://www.businessinsider.com/chilling-economic-report-terrifies-ceos-2012-12#ixzz2GH9uWyyd)

At the heart of the analysis is the issue of debt. A report by the Bank of International Settlements, the study notes, found that the combined debts of the public and private sector in the 18 core members of the OECD rose from 160pc of GDP in 1980 to 321pc in 2010.

That debt was not used to fund growth – perfectly reasonable – but was used for consumption, speculation and, increasingly, to pay interest on the previous debt as liabilities were rolled over.

As soon as asset price rises – fuelled by high levels of leverage – levelled off, the model imploded.

The issue is brought into sharp focus by one salient fact. In the 1960s, for every additional dollar of debt taken on in America there was 59c of new GDP produced. By 2000-10, this figure had fallen to 18c. Even in America, that’s about a fifth of what you’ll need to buy a McDonald’s burger.

Coupled with the huge debt burden are oversized public sectors and shrinking workforces. The larger the part the Government plays in the economy, the lower the levels of growth.

Deadwood
12-28-2012, 08:50 PM
Not even I have a snappy come back for that.

GrassrootsConservative
12-28-2012, 09:03 PM
It's this dude's fault:
1174
Weeping at the mess he has inherited from his own first term.

Captain Obvious
12-28-2012, 09:33 PM
Greece and Spain forged the boiler plate, we're stamping the final product.

Carygrant
12-29-2012, 04:13 AM
It's this dude's fault:

Weeping at the mess he has inherited from his own first term.


It's about time we rose above that crass level of comment .It's garbage and unproductive

I assume that the only true reason that the Fed is going to crank out an almost endless supply of imaginary money is to support central and other key banks , essentially within the EU and US .
We have had four / five years of repeated and blatant lies about the real level of toxic debts held by banks . Most experts believe that not much more than 60% of the full toxic position has been yet revealed .
On the plus side , this allowed the markets to ignore much of the true underlying crisis and prevent disastrous hysteria world wide .]
The question that has now to be addressed -- based on that premise ---- is , " What effects result from pumping endless amounts of imaginary money into the developed world economy?".
There will be devaluation of currencies and that must bring serious further US $ and Euro devaluation . This could drive inflation toward hyperinflation .
Economic chaos could easily result .
It seems we have delayed the inevitable world tsunami for about as long as reasonably possible . Pay - back time is almost here .

Dr. Who
01-11-2013, 02:25 AM
It is interesting that the world media comments on the effect of the Global Credit Crisis, much like it was a natural catastrophe to be overcome, and not manufactured out of overwhelming corporate/banking greed. Of course numerous regulatory changes have now been implemented to hopefully prevent the next GREED EVENT, but this is generally reactive behavior. Undoubtedly there is another such event on the horizon.

The World Bank (another dubious entity) and EU leaders are doing their best to bail out the junior EU members. Meanwhile, US debt is running at 95% of GDP. What would extreme currency devaluation do to the US economy? I'm not an economist, but if US currency rapidly devalued, the US would soon fall short on their ability to service their debt and would be at risk of some sort of foreclosure by their debt holders. It is questionable whether the World Bank would be able to help. EU governments are already stretched to the breaking point. America's biggest creditor is China. What would happen if they called in their loans?

Carygrant
01-11-2013, 03:24 AM
. What would extreme currency devaluation do to the US economy? I'm not an economist, but if US currency rapidly devalued, the US would soon fall short on their ability to service their debt and would be at risk of some sort of foreclosure by their debt holders.


Regardless , I believe it is US policy - though I cannot imagine it ever being publicly admitted to . I gather the likely devaluation figure is 50%
The advantages are that it will halve US foreign debt and theoretically boost exports . And give the Chinese reason to continue with handouts ( called buying junk bonds) in return for greater control of the US economy and tottering US banks --- any number to choose from .
Sure , it will make things almost impossible for the middle class but that really is their present position in society --- to be used as blotting paper . And with luck they will be so busy chatting about constant school massacres that most of it will be missed by them until it is too late .

Peter1469
01-11-2013, 09:53 AM
Regardless , I believe it is US policy - though I cannot imagine it ever being publicly admitted to . I gather the likely devaluation figure is 50%
The advantages are that it will halve US foreign debt and theoretically boost exports . And give the Chinese reason to continue with handouts ( called buying junk bonds) in return for greater control of the US economy and tottering US banks --- any number to choose from .
Sure , it will make things almost impossible for the middle class but that really is their present position in society --- to be used as blotting paper . And with luck they will be so busy chatting about constant school massacres that most of it will be missed by them until it is too late .


Correct. It is the unannounced position of the US to devalue its currency to make it easier to pay back its debt. This is the common tactic used by all nations for all of history. The problem for the US is that it is most likely impossible to pay back its current debt, much less its projected debt.

I would advise the US to enact polices to ease the coming crash. Once in place- tell our creditors to screw off. Repudiate it all. NOPD (not our problem dude).

Chris
01-11-2013, 12:08 PM
It's about time we rose above that crass level of comment .It's garbage and unproductive

I assume that the only true reason that the Fed is going to crank out an almost endless supply of imaginary money is to support central and other key banks , essentially within the EU and US .
We have had four / five years of repeated and blatant lies about the real level of toxic debts held by banks . Most experts believe that not much more than 60% of the full toxic position has been yet revealed .
On the plus side , this allowed the markets to ignore much of the true underlying crisis and prevent disastrous hysteria world wide .]
The question that has now to be addressed -- based on that premise ---- is , " What effects result from pumping endless amounts of imaginary money into the developed world economy?".
There will be devaluation of currencies and that must bring serious further US $ and Euro devaluation . This could drive inflation toward hyperinflation .
Economic chaos could easily result .
It seems we have delayed the inevitable world tsunami for about as long as reasonably possible . Pay - back time is almost here .

It's just as crass to focus on the US when "The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States." (source (http://www.oecd-ilibrary.org/docserver/download/5kgglrpvcpth.pdf?expires=1357924841&id=id&accname=guest&checksum=6C069B3354E02D257499D5EB0DCE6643)).