Debt Rattle September 21 2017


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    Pablo Picasso Jacqueline in Turkish costume 1955   • Yellen Brushes Aside Inflation ‘Mystery’ While Fed Eyes Rate Hike (BBG) • Federal Reserve Wi
    [See the full post at: Debt Rattle September 21 2017]

    Dr. Diablo

    How does a country, state, territory survive without power for half a year?

    We may all soon find out.

    But seriously, electric power is not life. It’s a tool that does certain things. We’ll find other ways, do other things, have other priorities, like each other, community, support, helping. Really it could vanish from the earth and we might be the better for it. No cyberattacks, no digital bank fraud, no universal surveillance state? Return to family, green things, plants and animals, meaning, slower life? So it has benefits AND costs, like nuclear power, like TNT, like flint knives. Let’s not go soft just on the benefits, but see the whole package.


    Generating global growth through debt is a questionable tactic.

    The global economy is driven by selling new items, so it depends on how much of this money is spent on these things.

    Money can be spent on other financial instruments such as shares, bonds and derivatives, none of which helps grow the global economy. This money can also be spent on second hand items such as houses, cars, paintings, etc which also does little for the global economy. If shares and houses increase in value then they suck in huge amounts of cash which then can not help the global economy. If prices fall it destroys money which can no longer help the global economy.

    If cheap money is given to the very rich there is only so many new items they can buy so most of the money will be used on financial products, houses or other non-productive assets.

    For a middle class person with a well paid job and job security then debt is merely a convenience and are likely to be good consumers.

    For the lower paid whose wages may be static and little confidence in their job security then debt is a burden. They are likely to be poor consumers concentrating on essentials.

    I see little reason to think that issuing debt will result in buying new items rather than simply inflating the price of things which already exist!


    Puerto Rico has decent power generation, and I bet it’s mostly intact. Their power transmission got hit, but that’s not difficult to restore, it just takes long to restore it everywhere. So San Juan will get power back probably by the end of next week, and some remote villages might get it back in 6 months. It’s not like they were heavily relying on electricity anyways – it always sucked.

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