Thursday, February 17, 2011

What could possibly go wrong?

What Is Wrong With The U.S. Economy? Here Are 10 Economic Charts That Will Blow Your Mind

But no debt spiral can go on forever. At some point this entire house of cards is going to collapse. If the economic trends documented by the charts continue, the U.S. economy will be totally wiped out. The U.S. economy as it currently exists is unsustainable by definition. It is only a matter of time before it slams into an economic brick wall.

Posted by general congreve @ 11:20 AM (1305 views)
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5 thoughts on “What could possibly go wrong?

  • general congreve says:

    I’ll get things going then. Everything’s wrong, that’s what!

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  • Can’t fault your opinion GC!

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  • China & Russia have been dumping US treasuries for a month. FT Article today.

    See 10 year note yield has jumped up. I don’t suppose anyone knows a fat lady with a good voice?

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  • I’m glad that the General has posted this because it gives me the perfect excuse to post a recent essay by Charles Hugh Smith:

    You Want Inflation? Here’s How To Get It

    Hughes suggests that all that the Federal Reserve have managed to do is transfer ever larger sums of money to the richest segment of America without creating the inflation that they crave for.

    “Unfortunately for the Fed, those with rising assets are no longer hankering for higher debt levels, and the bottom 80% are no longer qualified to borrow. So what we have is a speculative asset inflation which is spilling over into commodities as hot money borrowed for next to nothing seeks higher returns anywhere on the planet. Contrast this with organic inflation, in which people with lots of free cash are chasing limited goods and services.”

    Another way of looking at things:
    “During the height of the great galactic empire, everybody was rich. Or at least, nobody was really poor. Or at least, nobody that mattered.” (Hitchhiker’s Guide to the Galaxy, by Douglas Adams)

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  • general congreve says:

    @4 – A good point, but inflation is already feeding through via higher commodity prices and currency devaluation. Even if Merv is right and inflation falls back to target (laughs into hand), the debt levels pretty much guarantee the outcome won’t be pleasant and that ZIRP and QE have only delayed the inevitable.

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