Debt implosion never occurs because private debt leans on public debt. When public debt is threatened central banks find a way without intent to monetize the debt or deflate the relative size of the debt burden by inflating the incomes of everyone. That way they move the cost of the debt randomly back onto the people. Fair, I'd say except for those who try to act responsibly and don't create debt. They have to pay for the indolent. Thus you shouldn't be responsible. That's how the dynamic of economic history commandeers the integrity of every era.
You aren't paying attention to the precedent setting monopoly wage union compensation settlements over the last year. They are all in excess of 4%, yet productivity is flat at best. If the psychology of deflation was in the air in the least, you wouldn't be seeing Dow Jones raising ad rates. They would believe that there would be a net revenue loss to do so in a state of intrinsic deflation. Apparently they believe the advertisers can swallow the increases.
As far as foreign countries go, they have learned the game of beggar-thy-neighbor wage demands. It took them 5 years of West-like prosperity to learn it. The expansion of wealth they realized from hard competitive work needed a rest and so the excesses are digested in an economic pull back. This correctionary phase is perceived by pundits as depressionary. Teitmeyer doesn't agree. He says there are some strains, but that it is a mistake to conclude there is any significant problem. Meanwhile these governments are changing to the remedy of money pumping. In some cases that was right medicine. In others including here, it sews the seeds of disaster. Inflationary disaster. Money pumping is ok to reverse the apparent signs of deflation. Only in Japan do you see such signs. Nowhere else in the whole wide world. But the problem starts when you can't stop pumping because you fear the results if you do. The results are actually non-existent, but you'll never get leaders to believe that.
Once the foreign governments are relying on fiat money, you'll see foreign workers demanding higher wages in order to protect themselves from monetary inflation. We haven't got to that point here yet because the previous era of intrinsic deflation has caused enough slack and enough wealth so that we believe we can swallow a little bit of inflation. The proof of this is exemplified in the evolution of FED thinking. Six years ago the FED stated that 0% inflation was the objective. Three years ago they changed to 2% inflation is acceptable in order to ensure prosperity. Now, forget the inflation rate because in order to protect our own prosperity we have to bail out the rest of the world. Pretense always goes before a fall and the FED with their daily outright injections is painting themselves into a corner.
This debt thing is very humorous. It's there to bag the bag holders. According to them the US economically self-destructed 10 years ago due to the inexorable rise of the budget deficit adding to the national debt. Well, here we are, and the percentage of GNP taken by debt has fallen persistently since these claims were trumpeted by such cognoscenti. I have written plenty on why debt never matters. It doesn't matter because it is self-correcting and doesn't even get to a point where there is detectable economic effects. On the other hand if we the people elect to have bad economic policy put in place to correct the nominal or theoretical effects of debt, then you do have a problem caused by debt. But that is an issue of education. An uneducated populace will be more vulnerable to self-destruct for many other reasons like mindlessly following leaders into nuclear war. AN uneducated populace tends to look after itself over the interests of their government. That kind of self interest precludes debt from becoming a problem.
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