svkoho

Seven Uncomfortable Predictions for the Economy

Your comments are a necessary counterpoint to the frat boy cheerleaders on beerkeg TV. I think you could have added issues of unemployment consequences to societal stability, derivative risks, pension and medicare-aid obligations, failure of the american suburban/carcentric transport model and a peak oil pinch in the next 2 or 3 yrs. Good job and your writing style is tidy and sure. let see more!

Misunderstanding the Great Recession

Steve Hansen has written a comprehensive analysis of the causes of the current downturn. His graph of debt to GDP is particularly stunning as is his castigation of bean counters and economists who understand nothing because they see the world using binoculars that are turned around backwards. I draw the conclusion that if possible we need to return to a world where we in this country make things of value on site. We cannot grow our way out of this morass because as Steve points out the bulk of the "growth" has really been debt assumption for more consumption. If consumer consumption is 70% of our 13.8 trillion GDP what will GDP be very soon? .3 X 13.8 ??? Vast trillions of net worth are gone and we are borrowed out and the foolish assumptions of the Bush and Obama administration is that the solution is more cheap capital to the banks without a concurrent voting stake so that they can lend it out to people who don't want it is nothing short of insanity repeating the same failed policies that caused this disaster. We need to nationalize the banks and force mark to market rules, fire the bean counters and start from scratch. There are likely many good bankers to take the place of the imbeciles. There should be no rescues of bond or equity holders either here or abroad and they will squeal like pigs. The big banks are almost surely insolvent and pretending otherwise just delays the ultimate reckoning. There will be many nations in default in the next year or so and printing monopoly money and flooding the world with it risks a total collapse of the currency. Look at who is buying treasury securities and agency debt: the Federal Reserve and the day may soon be at hand when they are the only buyers. I fully expect the big overseas holders of our debt will begin unloading this debt and if and when that snowball starts rolling, katie bar the door.