Robbing the Future to Make the Present Look Semi-Reasonable

[canbuywontbuy]

Obama borrowed $9,000,000,000,000 ($9 trillion) and nearly doubled the US debt burden in 8 years.

Many will think he was a steady hand at the helm.  When you borrow $9 trillion, you can create an illusion of stability.  If he hadn't had borrowed so much, he would have been seen as a disaster as the US would have suffered a depression. 

The UK national debt is fast approaching £1.8 trillion, will be more than £2 trillion by 2020 (easily) with the Tories net borrowing around £8Bn a month.  In June 2010, the UK national debt was around £1 trillion.  An easy doubling of the national debt in 10 years of power (albeit 5 of those in coalition). 

All of this debt is burdening the future with toil to pay this off. GDPs have to keep up with the the debt burden to make that happen.

Irresponsible MSM reporting of the economy rarely mention either deficit spending or the national debt. 

I just wonder where this is all going - it must be heading to some big debt jubilee where TPTB pick who the winners and losers will be in the "new system"?  Can you imagine growing up as a kid now - going to school, getting an education, picking a career - and all of that is meaningless because a debt reset is on the way, and you have no way to know how that will impact you? Or a debt reset is not on the way, and you're stuck in a zombie economy saddled with crippling debts?

Edited November 29, 2016 by canbuywontbuy

[SpectrumFX]

It's like Injin used to say. "Printy, printy".

The plan with national debt is never to repay it. Just to keep devaluing the currency so that the payments stay manageable. 

They've bitten off more than they can chew this time, but there is no other plan. The option is a straight out default and collapse with the IMF called in to flog the dead horse that is our economy, or the traditional stealth default through inflation. Mind you, the amount of inflation they need will be hard to do with any pretence of stealth.

[Venger]

Where has all the money gone from swelling central bank / Gov balance debt sheets in such a short number of years?????

To prepare the financial system for change ahead, imo.

Quote

 

June 3, 2013: 5:00 AM ET
Most of the big banks say they will make money from rising rates.

"Something like 20 of the 25 biggest banks in the nation will tell you they will make money when interest rates rise," says Glenn Schorr, a top bank analyst at Nomura. "But when you listen to regulators you still hear fear."

For the time being, bank investors seem to be siding with the CEOs. Shares of the big four banks, Bank of America (BAC), Citigroup ©, JPMorgan Chase (JPM), and Wells Fargo (WFC), have all been rising lately despite the recent rise in rates.

The problem is that's not the way things have played out before. Rising interest rates, particularly sharp increases, have generally been bad news for banks' bottom lines. That's what happened in 1994 when the rates jumped 3%.

But bank analysts say it could be different this time around. We are starting at a much lower point on interest rates than we did nearly two decades ago. Recently, the extreme low interest rates have been a negative for banks, pushing down their net interest margins, which is the difference between what a bank pays for funding and what it gets back in interest when it makes a loan. The analysts say rising rates will significantly improve the banks' lending profits, especially since the big banks have vastly more deposits, on which the banks pay close to nothing to savers, than they did two decades ago.

more at http://finance.fortune.cnn.com/2013/06/03/jpmorgan-dimon-bond-bet/

 

The thought of jubilees ahead has even had the BTLers/HPIers doubling down more into housing.  Ridic.  More so at the moment, after moves against BTLers, with them clinging onto hope their debts are forgiven, they keep assets, and renters get something like £5K compensation too.   Thanks a lot.  Leaving renter-savers in worse position than they are in now!   Fantasy stuff.

System is far more positioned for HPC now.

Only new life can defeat death.  (Final Destination 2)

Only new debt (on hpc prices and knocking out the BTLers and HPIers) can defeat structural debt.  (Venger).

[Roman Roady]

Yes the current crop of politicos have just spent and spent....i guess they think they have got away with it with MSM onside.

Utterly disgraceful...especially that platitude ridden non entity BHO.

Borrow 9Tn over 8 years and then spend your time giving meaningless sound bites in support of every minority you can think of.

Give me 9Tn over 8 years and I will show the US a good time!

 

Unfortunately for all of them, the majority seem to have woken up...I fear the whole western world is about to go the same way as the Balkans did in the 90's.

[Oliver Sutton]

And you still hear people talking about all the years of austerity.

Edited November 29, 2016 by Oliver Sutton

[crashmonitor]

Obviously the biggest elephant in the room. Got ridiculed on another thread for having the temerity to suggest that we are borrowing our kid's future to pay for  welfare today.

We don't earn our way anymore we borrow the shortfall from the rest of the world.

No point arguing with the left and entitled we must just wait for implosion. I've given up.

Edited November 29, 2016 by crashmonitor

[Blod]

22 minutes ago, Oliver Sutton said:

And you still hear people talking about all the years of austerity.

It's the lefts default position, we can borrow our way to a bright future. Their current problem is that this makes them appear unelectable when so many fail to see the cuts they keep telling us are devastating the country.

44 minutes ago, Roman Roady said:

Borrow 9Tn over 8 years and then spend your time giving meaningless sound bites in support of every minority you can think of.

This wise observation highlights how out of touch they are.

Are we arriving at a time when it's no long electorally disaster to talk openly about our economic predicament as long as you appear credible.

[spyguy]

21 hours ago, crashmonitor said:

Obviously the biggest elephant in the room. Got ridiculed on another thread for having the temerity to suggest that we are borrowing our kid's future to pay for  welfare today.

We don't earn our way anymore we borrow the shortfall from the rest of the world.

No point arguing with the left and entitled we must just wait for implosion. I've given up.

I think you'll find its the grandkids future too.

Its insane.

You can see why, crude as it is, a balanced budget appeals to people. Sure, we'r tying our hands a bit but the temptation to dump the sh1t of the future is too great.

We dont bury nucleur waste in the centre of towns. We should should not run up vast deficit either.

 

[durhamborn]

Scrap Tax Credits and Foreign Aid and there is no deficit.Add in a 30% Housing Benefit cut and you can even start to pay the debt down.Working towards that over 10 years while pushing a strong industrial policy might save us.The fact a recession (next part of the depression) is due is even more worrying considering we have a 6% structural deficit already.

[GrizzlyDave]

Debt is currently very cheap.

The U.S. And UK economies are growing.

as long as these two continue, no problem.

[One-percent]

17 minutes ago, durhamborn said:

Scrap Tax Credits and Foreign Aid and there is no deficit.Add in a 30% Housing Benefit cut and you can even start to pay the debt down.Working towards that over 10 years while pushing a strong industrial policy might save us.The fact a recession (next part of the depression) is due is even more worrying considering we have a 6% structural deficit already.

But they have spent the last 30 years dismantling our industrial base and selling off what was left.  As a country we don't even own the essentials such as water and electricity. Given this, I don't see any appetite for rebuilding.

i honestly don't understand the reasons why the policies have been pursued.  It is either the nastiest conspiracy or monumental cockup.  

[One-percent]

1 minute ago, GrizzlyDave said:

Debt is currently very cheap.

The U.S. And UK economies are growing.

as long as these two continue, no problem.

In what ways are they growing?  Genuinely interested in your analysis 

[TheCountOfNowhere]

Great definition of debt:  "Robbing the Future to Make the Present Look Semi-Reasonable"

[SpectrumFX]

Just now, GrizzlyDave said:

Debt is currently very cheap.

The U.S. And UK economies are growing.

as long as these two continue, no problem.

Yes. As long as we keep making debt cheaper nothing can ever go wrong

[doomed]

6 hours ago, SpectrumFX said:

It's like Injin used to say. "Printy, printy".

The plan with national debt is never to repay it. Just to keep devaluing the currency so that the payments stay manageable. 

They've bitten off more than they can chew this time, but there is no other plan. The option is a straight out default and collapse with the IMF called in to flog the dead horse that is our economy, or the traditional stealth default through inflation. Mind you, the amount of inflation they need will be hard to do with any pretence of stealth.

The problem they have is it requires exponential growth of the debt to keep functioning. It will not end well.

[TheCountOfNowhere]

1 minute ago, doomed said:

The problem they have is it requires exponential growth of the debt to keep functioning. It will not end well.

They already have it...in house prices !!!!!

 

We've all be f**ked over and supported by the moronic hoards investing in BTLs

 

[TheCountOfNowhere]

1 hour ago, crashmonitor said:

Obviously the biggest elephant in the room. Got ridiculed on another thread for having the temerity to suggest that we are borrowing our kid's future to pay for  welfare today.

We don't earn our way anymore we borrow the shortfall from the rest of the world.

No point arguing with the left and entitled we must just wait for implosion. I've given up.

I reached that point several months ago.  

BrExit was the last chance for the establishment/rich to start listening to the people.  

Have they ?  Have they f**k.  Will they ?  Will they f**k.

As I expected, BrExit is not happening, it is being subverted, the bankers simply wont let it happen in any meaningful form.  The banks are still, 10 years later, bankrupt, nothing has been fixed and they are still desperately trying to keep this illusion of stability.

It's a sham, a massive con.

The bankers have done it before, in history and wiill do it again.

The real bankers will have made a fortune from QE and the banker collapse and at some point they system will have to collapse.

The people responsible will not be punished.  The people will suffer.

 

[zugzwang]

Great thread title.

[VeryMeanReversion]

6 hours ago, canbuywontbuy said:

 

I just wonder where this is all going - it must be heading to some big debt jubilee where TPTB pick who the winners and losers will be in the "new system"?  

My view is that each £/$ is just a promise.  Those promises can no longer be met in any reasonable way.

Promises being broken means inflation and/or write-offs.

For the first 7 years I was on this website, I expected the powers that be to act responsibly.  Then I gave up. In the last 6 years, I've swapped my £'s for real stuff (capital, not used for consumption).  Any cash I have is only kept until a decent capital buying opportunity comes up.

 

[Little Frank]

8 hours ago, canbuywontbuy said:

Obama borrowed $9,000,000,000,000 ($9 trillion) and nearly doubled the US debt burden in 8 years.

Many will think he was a steady hand at the helm.  When you borrow $9 trillion, you can create an illusion of stability.  If he hadn't had borrowed so much, he would have been seen as a disaster as the US would have suffered a depression. 

The UK national debt is fast approaching £1.8 trillion, will be more than £2 trillion by 2020 (easily) with the Tories net borrowing around £8Bn a month.  In June 2010, the UK national debt was around £1 trillion.  An easy doubling of the national debt in 10 years of power (albeit 5 of those in coalition). 

All of this debt is burdening the future with toil to pay this off. GDPs have to keep up with the the debt burden to make that happen.

Irresponsible MSM reporting of the economy rarely mention either deficit spending or the national debt. 

I just wonder where this is all going - it must be heading to some big debt jubilee where TPTB pick who the winners and losers will be in the "new system"?  Can you imagine growing up as a kid now - going to school, getting an education, picking a career - and all of that is meaningless because a debt reset is on the way, and you have no way to know how that will impact you? Or a debt reset is not on the way, and you're stuck in a zombie economy saddled with crippling debts?

Why? 

[Simon Taylor]

None of this matters.  

Neither the USD or GDP are linked in value to anything tangible.  One day governments may discover that the institutions hitherto willing to keep lending into this illusion prefer Vietnamese or Angolan or Indian bonds instead because they offer a better yield AND have a greater potential for not defaulting.

Then we have a problem which will end in default,  huge money printing and ruinous inflation.  But of course the politicians who signed off all the borrowing in the first place are no longer around to face the electoral consequences.

Funny old business,  democracy.

[zugzwang]

BOOM!! UK consumer credit hits 11 year high.

Apeshit crazy, just like 2005.

http://uk.reuters.com/article/us-britain-lending-idUKKBN13O0VF

Quote

Lending to Britons expanded last month at the fastest annual pace in 11 years and mortgage approvals were stronger than expected, bolstering the picture of resilient consumer demand after June's Brexit vote.

Consumer credit increased last month by 1.62 billion pounds, up from 1.48 billion pounds in September and taking the annual growth rate to 10.5 percent - the strongest since October 2005, Bank of England data showed on Tuesday.

Mortgage approvals for house purchases increased to 67,518 in October from 63,594 in September. Analysts in a Reuters poll had forecast 65,000 mortgage approvals were made in October.

Britain's economy has performed much better than most economists had expected in the immediate aftermath of June's vote to leave the European Union, with households showing few signs of being fazed by the referendum result.

Less comprehensive figures from the British Bankers' Association also showed consumer lending grew in October at the fastest pace in nearly 10 years.

 

[TheCountOfNowhere]

Mortgage lending is string.

Got to wonder why they lowered IRs and printed all that money then.

Who the f**k is buying houses at these prices ?

[Riedquat]

2 hours ago, spyguy said:

We dont bury nucleur waste in the centre of towns.

Might handily devalue the house prices there.

[Errol]

Ludwig von Mises put this most succinctly:

 

...'The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a "crack-up boom" and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances'...