Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Amark$p who wrote (101096)	8/20/2009 8:12:14 PM
From: Elroy Jetson	Read Replies (4) of 116555

Creditors of American consumers and businesses will not be repaid with cheaper Dollars. They will mostly not be repaid at all! Stop and think. U.S. banks are but a small part of this picture. Creditors around the world hold this debt. Debt which is being liquidated through foreclosure and bankruptcy. What part of this is difficult to understand? You notice from the chart that U.S. government debt totals 80% of GDP and this will rise somewhat, perhaps even as high as 100% of GDP. But as you point out, the total ratio will certainly rise as high as 400% of GDP before the liquidation takes cuts it down. That's debt worth 300% of the U.S. GDP, most of which is simply going to vanish in court proceedings! This deleveraging will be the largest reduction in the number of U.S. Dollars in history. What about consumer spending? Let's see. What do you think will happen to most consumers if their debt had been eliminated a few years earlier? They will chastened, to be sure, but their income which previously went to pay for debt service is now available for consumption. I bet you can't even conceive of what is just starting to occur. .

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next