Debt Rattle Feb 19 2014: Bad! Bad Data!


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    Fenno Jacobs for OWI “Southington, Connecticut. Girls at drugstore” May 1942 The story of the day should perhaps really be the 26+ killed and 1000+ wo
    [See the full post at: Debt Rattle Feb 19 2014: Bad! Bad Data!]

    steve from virginia

    Chinese cannot lend to US government and businesses b/c US consumers don’t buy as much Chinese poison dog food and lead-painted children’s toys.

    Less dog food sales => less consumer borrowing => less dollar flows to China => fewer dollars to be lent back to US government to kick the ‘lending to China’ can down that road one more time.

    Why less dog food sales? Previous rounds of sales have bankrupted US consumers. You cannot get blood out of a bag of poison dog food or a can, either. China is also burning candle at both ends: spending its remaining dollars on petroleum to feed its ballooning fleet of useless automobiles. Not only is US bankrupt but so is China. Both need bailouts!

    At some point China joins Japan w/ trade deficit and that is the end for them just like trade deficit is knife in eyeball for Japan. Neither country can exist for long as industrial state on domestic energy production, they must import or die.

    Both China and Japan have relied on US and European customers to finance these imports. No more.

    Cars … poison dog food … 400 years of ‘progress’ have come to this. Good grief!


    Seems to me,

    1. Taking on debt for consumption purposes is a bet there will be a Jubilee. In which case no one will need to pay it back.

    2. Or, debt is taken on with a plan B intention of personal default.

    3. Or, debt is taken on in a buy forward action, with the intent of paying it back in cheapened dollars.

    Place your bets.

    Though the prudent don’t do debt, unless it self liquidates with a high rate of return, number three is my book.

    Certainly, all markers are being called in to the core, there in Washington D.C.

    And Argentina is just a symptom of what’s coming to a Keynesian World gone mad.


    Paul Craig Roberts on Ukraine:

    “The protests in the western Ukraine are organized by the CIA, the US State Department, and by Washington- and EU-financed Non-Governmental Organizations (NGOs) that work in conjunction with the CIA and State Department. The purpose of the protests is to overturn the decision by the independent government of Ukraine not to join the EU.

    The US and EU were initially cooperating in the effort to destroy the independence of Ukraine and make it a subservient entity to the EU government in Brussels. For the EU
    government, the goal is to expand the EU. For Washington the purposes are to make
    Ukraine available for looting by US banks and corporations and to bring Ukraine into NATO so that Washington can gain more military bases on Russia’s frontier. There are three countries in the world that are in the way of Washington’s hegemony over the world–Russia, China, and Iran. Each of these countries is targeted by Washington for overthrow or for their sovereignty to be degraded by propaganda and US military bases that leave the countries vulnerable to attack, thus coercing them into accepting Washington’s will.”

    Washington Orchestrated Protests Are Destabilizing Ukraine

    And see:

    “Of course, not all of the protesters are paid. There are plenty of gullible dupes in the streets who think they are protesting Ukraine government corruption. I have heard from several. There is little doubt that the Ukraine government is corrupt. What government isn’t? Government corruption is universal, but it is easy to go from the frying pan into the fire. Ukrainian protesters seem to think that they can escape corruption by joining the EU. Obviously, these gullible dupes are unfamiliar with the report on EU corruption issued February 3 by the EU Commissioner for Home Affairs.”

    US and EU Are Paying Ukrainian Rioters and Protesters — Paul Craig Roberts


    “The Chinese Dominoes are About to Fall: Complete List of Upcoming Trust Defaults” by Zero Hedge.



    I’m far from an economist but where are the cheapened dollars going to come from? The demand for labor is headed down imo. Inflation and rising interest rates will set up the perfect storm for people already in debt to their eyeballs.
    I don’t think the twentyfive percent quoted in the link are shrewd but deluded.



    “where are the cheapened dollars going to come from?”

    The Fed. Inflation. It’s all they know. Rising rates, when they finally materialize, will be after the fact. Devaluation will have already started and will be building momentum, by the time the Fed tightens. They are always well behind the curve in arresting the bubbles they so naively create.

    They didn’t see the stock bubble of the 20’s, the Stagflation of the 70’s, the dot com bubble, the equity and housing bubbles of the 2000’s, until it was too late. Nor do they see the bubble they are now in the early stages of creating. Hell, they never allowed the last one to completely clear!

    Nothing new here, they have learned nothing. The Fed will monetize until it no longer exists, or the currency is destroyed or likely, both.

    As I have said here before, my bet is on Stagflation over the next decade, with rotating spurts of inflation and disinflation (as opposed to deflation)

    This is basically the symptom of an Inflationary Depression. The worst kind. One where prices rise, wages don’t keep up, products begin disappearing from shelves, and the ill advised creators of it prolong it.


    To wit;

    “Sound money is the bedrock for prosperity and the best check on big government and crony capitalism.” RP

    Sound money puts the power of markets back into the hands of the people, where it can be best allocated, at the local level.



    Chinese dominoes. The Fed has declared economic war on the Emerging Markets. Those markets to which it has been exporting it’s inflation. Can anyone see a happy ending to this strategy?

    Couldn’t help notice, EE Bonds are now paying zirp. Wow, return free risk!



    Please disregard the inflation stuff you read in the comments here. It’s hard for people to let sink in, now as it was years ago, though even simple price rises are slowing to say the least, let alone actual inflation, but, as The Automatic Earth has said through those years, a debt bubble must always lead to deflation, and a bigger one to deeper deflation. Sometimes it’s the easiest things that are hardest to process.


    I get get your coming from but just don’t see it playing out like that anymore. The debts are just too large for governments to overcome, and any “printed” money does not get to the people who would spend it on goods and services.

    Ilargi, thanks for that. I am a “convert” thanks to Nicole and yourself. Hope your feeling better soon.

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