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Strategies & Market Trends : Zman Market Timing

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To: gold$10k who wrote (31)10/8/2013 8:34:31 PM
From: zman69   of 15903
 
Don't forget about the denominator that equation. To drop the ratio you could reduce the debt OR grow the GDP.

Austerians think that we should cut our way out of this mess, but as Europe has shown that is self-defeating. As everyone including the government tries to de-leverage at the same time the result is a contraction in GDP and the multipliers are such that the Debt/GDP ratio actually goes higher. What we need now is growth, and the way to get that growth is through stimulating demand not through cutting spending.
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