Debt Rattle January 25 2017
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Jack Delano Family of Dennis Decosta, Portuguese Farm Security Administration client 1940 • US Demoted To ‘Flawed Democracy’ (CNBC) • David Stockman:
[See the full post at: Debt Rattle January 25 2017]Ilargi,
As an American, I can tell you that American politics, Democrat or Republican, is all about more cars. Even the enviros want a nation of a couple of hundred million electric vehicles. Battery production apparently has no environmental impact.“We are at $20 trillion of debt.” – Stockman
Translation…”private savings are at $20 trillion”. The opposite side of the double-entry accounting.
German Greens Move To Water Down Nature Protection Laws – To Clear Way For Wind Parks!
I guess the Greens of Germany like the colour of money.
So sad. The latest manifestations of the Trotskyists – what Stalin called Cosmopolitans – are out of power. Such a shame. Could not happen to a nicer bunch of people. To be displaced by an elderly white male is such a disgrace.
$20 trillion in savings?
By whom? How was it derived?
There couldn’t be any of that fiat currency involved, could there? You know–that stuff found all over the world.
Just asking.
Nassim,
Thanks for the link. I hadn’t seen that article about the neo-cons.
So tell me something. What is the over-arching goal of the neo-cons?
Have any insights?
Chris M,
Check out what the Trotskyists were all about and that should help.
Permanent Global Socialist Revolution – under their leadership of course. Essentially, the destruction of Nationalism so that we all become hybrids – except for the Chosen People of course.
You can already see how we are half way there in both the USA and now Europe. Russia has been inoculated against this infection by their tragic history. People like Dmitry Orlov (American / Russian / Jewish) think that the USA will have a somewhat similar experience. Dmitry is obviously not one of them.
Reinventing Collapse: The Soviet Experience and American Prospects
It would be nice if Trump could put an end to this. Far too difficult IMHO..
Times Of Israel Removes Elad Nehorai’s Article “Jews DO Control The Media”
Chris M,
I just saw another article which demonstrates what is clearly going on:
Eliminating Currency = Communism – Martin Armstrong
This sort of nonsense is obviously being promoted with a view of enslaving the people of the world. There can be no other explanation. Do you think the currency of North Korea has any real value in that country?
Note how those who control the media are saying almost nothing about the catastrophe being enacted in India at present. Banknotes representing 85% of all transactions have been arbitrarily cancelled. This is not something that Modi suddenly dreamed of. He was pushed in that direction by outsiders.
WHY MODI’S INDIAN BANKNOTE BOMBSHELL HAS SHADES OF NORTH KOREA’S CURRENCY DISASTER
Chris M.
“By Whom. How was it derived?”
By Congress. From simple accounting.
Dollars are created by Congress when it passes spending bills and the President signs off on them. By accounting this is recorded as a liability (debit or debt) on the government side of the transaction when Treasury writes a check (marks up bank accounts) and an asset (credit or deposit) on the non-government side.
It is by this simple rule of accounting that all money is debt…debt by definition. What is debt for one is (must be by accounting) an asset for another.
All currencies in the World is fiat – from nothing. Money has no intrinsic value…it is a measure of claims on goods and services one has acquired.
Where do you think the $ in your bank account came from?
pjmeli,
I understand how fiat money is created and fractional reserve banking.
My point is that I don’t think all the government debt was purchased with earnings.
And… I have my doubts Stockman really understands how a functional national economy is supposed to work. The supply siders always talked about supply creating its own demand. That’s true, but what they never talk about is the supply, particularly the raw material supply, being PRICED at parity to generate enough national income to consume the supply. If you don’t generate enough income, you tend to resort to debt to make up the difference.
That’s the lesson Stockman, Reaganites, and supply siders need to learn.
Chris M
“…fractional reserve banking”
At the risk of being argumentative this particular zombie must be slayed.
Fractional Reserve Banking™ doesn’t exist and never has. Every central bank in the World has gone on record that loans create deposits. Banks create money out of thin air when they make loans. Fractional reserve banking is a Rube Goldberg mathematical exercise untethered from the way things work in the real world. Like economics.“I don’t think all the government debt was purchased with earnings.”
Not sure how ‘earnings’ got into this. Some government debt is held by the Fed though, maybe about $5T. The government owes $ to itself, while unconstrained in it’s ability to create $. I say unconstrained but the one constraint is that $ can’t buy something that doesn’t exist.
Use of the term National Debt™ to describe our savings is Orwellian. Unfortunately, almost all of the $ in existence (not including bonds) are owed to the banking system. So what do we have in our pension funds?
“…supply siders always talked about supply creating its own demand. That’s true…”
Not true. What a business pays $1 to produce costs about $3 to buy, meaning business creates a fraction of the demand necessary to consume its own production. The additional income required comes from other sources, either as a result of federal spending or through private borrowing.
For example in 2015 businesses invested approx. $3T, yet Consumption was some $10T. The Federal Government spent about $4T. Private debt increased by about $1.5T.
Supply-siders will not learn what is in their best interests not to learn (paraphrasing Upton Sinclair). Starving the system keeps workers down, leaving business with the power, which is more important to them than money.
pjmeli,
If fractional reserve banking doesn’t or never existed, I’m not sure why it has a trademark. Anyways, I don’t mind arguments, but I didn’t really want to get in a discussion about how fiat money is created, or the Federal Reserve.
To use your data, if it costs business $1 to produce, and it costs $3 to consume, then the selling price is much too above parity price, and business is getting more than its fair share. That’s why there isn’t enough income to consume. The economy is quite out of balance. However, I’m not sure where you are deriving your data. Data collectors have a knack for massaging the numbers for their particular benefit. You can’t analyze where things out of balance in the economy using massaged data. It can’t work.
I think we can agree on one thing. If we need debt to consume, something certainly is out of balance in the economy. I know farmers in the US haven’t gotten parity prices for their commodities since the 1950’s. Knowing that parity prices for raw materials is vital to provide enough income to consume, that’s a place that certainly needs fixing in order to make the economy solvent. Earn our way, not borrow our way!
I have heard Varoufakis say “investments in green technology not 4-wheel drive cars,” indicating that he means a different kind of growth substituting for the kind of growth we have had. If there is any kind of growth coming up, it must be by means of substitutions in the end products created, to be not petroleum-dependent in either their material make-up or in their necessary processes. Of course this means huge disruptions in how people are employed, or not. The structures planned in Yanis’ New Deal will be essential to smooth a sane social path to really new ways of living, both materially and socially. Fossil fuel-based growth is over, but there may yet emerge a different kind of growth.
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