Hello Ray, according to the latest Richebacher Report,
"During the five years from 2000–05, U.S. nominal GDP grew by $2.6 trillion and real GDP by $1.3 trillion. Over the same period, total indebtedness increased $12.3 trillion. The huge difference between GDP and debt growth indicates that the debts went overwhelmingly into asset purchases, fueling asset price inflation. This is where the Great Global Inflation has been concentrated."
... and so we might do well by concluding that,
(i) what ever had gone on will eventualy stop
(ii) what went up in 5 years elapsed time might come down within a duration of 30 months
(iii) bigger the debt-enhanced boom, nastier the debt-deflation kaboom
(iv) suppose 6 trillion of debt-deluge gets withdrawn, and their counter-party asset deflation might go DOWN by the same amount, by and by, and if so, equity gets vaporized
Remember, the volume of deluge, in the form of true capital, as opposed to that printing press hot stuff, is determined in Tokyo mostly, and Beijing, only by derivation, and, in all cases, control most assuredly does not reside in Washington.
Do the phrase, "out of control" ring alarm bells.
(v) but,no, the debtors will not benefit from default, because the asset is not worth what he paid for, and the cash flow will not support the remaining principal balance, especially if the debtors' pensions are in fact invested in the debt, round-about way
(vi) so, USD rising is easily explained, as exodus gate is the USD, but then the gate will collapse, at some point, when 8,000 hedge funds concludes that the dollar is doomed, or, alternatively, the economy is finished; outcome to be decided by Helicopter Ben BoomBurpBurnKaput.
Folks do not expect the collapse of the US economy, real or financial, and that in fact is the stark choice coming up, precisely.
What else can I do besides yelling, "fire in the theatre" ?
Chugs, J |
