Try not to get misled by the day to day gyrations of the market. Keep the big picture in view. Debt to GDP of 90% is the key point where a country can no longer grow and is susceptible to a shock. Have you seen Portugal and Spain listed as the next countries to fall in Europe? It seems a much bigger country has a worse debt to gdp ratio than these two countries. Just to make your day, with the current deficit projection and 2.5% GDP growth, our debt to GDP ratio will be 103% by next year’s election.
The United States is heading towards Niagra Falls in a barrel. I wonder what will happen next.
“Those who remain unconvinced that rising debt levels pose a risk to growth should ask themselves why, historically, levels of debt of more than 90 percent of GDP are relatively rare and those exceeding 120 percent are extremely rare (see attached chart 2 for U.S. public debt since 1790). Is it because generations of politicians failed to realize that they could have kept spending without risk? Or, more likely, is it because at some point, even advanced economies hit a ceiling where the pressure of rising borrowing costs forces policy makers to increase tax rates and cut government spending, sometimes precipitously, and sometimes in conjunction with inflation and financial repression (which is also a tax)?” – Rogoff & Reinhart
Debt/GDP Around the World 2006-2011
| Debt/GDP 2006 | Debt/GDP 2011* | |
| Russia** |
9.0%
|
12.9%
|
| China |
16.5%
|
18.9%
|
| Australia |
9.76%
|
23.6%
|
| Indonesia |
40.4%
|
26.3%
|
| Korea, South |
30.1%
|
30.5%
|
| Switzerland |
47.2%
|
37.8%
|
| Turkey |
46.1%
|
42.4%
|
| Mexico |
38.3%
|
45.7%
|
| Brazil |
66.7%
|
66.6%
|
| Netherlands |
47.4%
|
69.4%
|
| Spain |
39.6%
|
70.2%
|
| India |
76.0%
|
71.4%
|
| Germany |
67.6%
|
76.5%
|
| Canada |
69.4%
|
80.5%
|
| UK |
43.1%
|
81.9%
|
| Portugal |
63.9%
|
87.1%
|
| France |
63.7%
|
87.6%
|
| U.S. |
61.1%
|
99.3%
|
| Belgium |
87.3%
|
103.1%
|
| Italy |
106.5%
|
119.7%
|
| Greece |
97.1%
|
139.3%
|
| Japan |
191.3%
|
234.1%
|
| *IMF estimates | ||
| ** Russia defaulted on its debt in 1998 | ||
Stucky says:
Above pic is Roman bronze centenionalis issued by Constans (337-350AD), the youngest son of Constantine I the Great.
The picture is that of a Roman soldier about to kill a fallen barbarian horseman symbolizing the barbarian threat to economic stability. The legend or caption reads, “fel temp reparatio”. Translation; “the Restoration of Happy Times”.
In more contemporary terms “Happy Days Are Here Again”.
Interesting, is it not, how governments always promise undeliverable shit to the people? The Romans had Constans. We have Obama. Or, the next buffoon who’ll kick the can down the road. Things are better!” “Happy times are here!!!”
But Rome fell. And so will we.
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1
27th October 2011 at 2:02 pm
Dave says:
What’s happening in Japan?
Hot debate. What do you think?
1 
8
27th October 2011 at 3:41 pm
King-shat says:
I love liberty like fresh cool air in my lungs.I love freedom like fresh cool water on my tongue.I love peace like the smooth skin of my sweet lady.And Dr.Ron Paul is the hero I believe will change the world.
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0
27th October 2011 at 3:52 pm
Centerfield says:
Somebody please tell me why Cain is getting all of this publicity then?!? I don’t get it.
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27th October 2011 at 4:02 pm
Smokey says:
I love King-Shat’s lips around my massive anaconda like the tradewinds blowing in off the Mediterranean Sea.
And Ron Paul is a cinch for victory. His money bomb raised $3 million in one day last week. Keep sending him your money, as your donation could be the one that puts him over the top.
RP 2012
Hot debate. What do you think?
3 
5
27th October 2011 at 4:04 pm
Smokey says:
Centerfield—–because he is leading the race.
Hot debate. What do you think?
4 
5
27th October 2011 at 4:04 pm
Smokey says:
When Romney was leading, he got all the publicity.
When Michele Bachmann was leading, she got all the publicity.
When Perry was leading, albeit briefly, he got all the publicity.
When Ron Paul was, oops, strike that, I don’t think he’s gotten past fourth place, ever, in this race.
When Ron Paul soon inevitably becomes the frontrunner, after you send him some more money, THEN he’ll be getting all the publicity.
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4
27th October 2011 at 4:10 pm
Administrator says:
Dave
21 year recession in Japan.
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27th October 2011 at 4:13 pm
Thinker says:
Un-fucking-believable:
Nightmare scenario: U.S. deflation risks rising
WASHINGTON (Reuters) – Risks are rising that a moribund job market and potentially steep drop in inflation could push the United States into a downward spiral of falling wages and prices.
That nightmare scenario of deflation might seem remote considering a recent rebound in growth, and the Federal Reserve would almost certainly try to head it off, probably well before prices started to fall.
But some investors and economists say the risk is real.
Inflation is expected to more than halve over the next year as a spike in prices for goods like oil and grains unwinds. Unemployment, meanwhile, will likely hold at nearly double its pre-recession level well into next year, keeping incomes under pressure.
If forecasts are correct, that could present a dangerous combination the Fed might not allow to brew for very long.
More here.
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0
27th October 2011 at 4:16 pm
Stan says:
Adminstrator,
Do you think its a good time to buy silver now?
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1 
0
27th October 2011 at 4:16 pm
Administrator says:
Stan I bought silver last month at $32. I buy on the dips. I usually don’t buy when it is rising. Some people wait until it starts to rise before buying. I’m just accumulating whenever the funds become available.
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27th October 2011 at 4:19 pm
Smokey says:
Stan,
Me and you still gonna dance ?
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2 
2
27th October 2011 at 4:21 pm
Administrator says:
Thinker
Oil up 23% in 24 days and the MSM reports the threat of deflation. Is there anyone out there who wouldn’t mind seeing their food and energy costs drop 20%?
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27th October 2011 at 4:22 pm
Stan says:
Smokey,
No man. You win.
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27th October 2011 at 4:23 pm
Thinker says:
Admin,
I agree. But what rankles me is the “The Fed will save us!” line. Bull. Shit.
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27th October 2011 at 4:23 pm
Stucky says:
Stan
You pussy.
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1
27th October 2011 at 4:28 pm
Smokey says:
Stan,
Drink a bottle of liquor some time in the next few nights then come on back nice and tight and we’ll go at it.
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4 
0
27th October 2011 at 4:32 pm
dd says:
yep Admin, so true. the only deflation i see is in the things we own (theoretically, anyway) like housing, but inflation everywhere else: education, health care, rents, food, energy, the list goes on.
i saw Peter Schiff at OWS on a reason.tv clip. while i am very much behind the protest, i do not think many people there understand why they are there, they only know that the consequences of hurrendous keynesian policy has left them in a world of shit. but it is truly staggering how many people there haven’t a clue about, well really anything at all, beside what’s on their iPad.
where we part is the faith in the Millenials. i don’t see many heroes there day-to-day. i hope that is proven wrong. people often do grow up and change — maybe their current pain and suffering will teach them to live within their means, unlike so many boomers. and while i agree with you that they are not dumb, i fear that they have been coddled by the Great Moderation, are not the hardest of workers, and they have been so brainwashed into expected help and regulation from gov’t. huge, sweeping generalization — again no one would be happier than i if this proven wrong.
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27th October 2011 at 4:43 pm
Administrator says:
dd
40 million of the Millenials aren’t even 20 years old yet. Live within their means? They haven’t started living yet.
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4 
1
27th October 2011 at 5:08 pm
dd says:
Admin, yes. maybe the times they are in now, which are hard, will teach them to live within their means for the rest of their lives. so when they do get a job that pays, whatever, pick a number, they don’t go lease a beamer and “buy” a house they cannot afford. whatever the boomers learned at 20 didn’t work, maybe what the current 20 year olds learn now will translate to a positive future. like with Depression babies.
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4 
0
27th October 2011 at 5:24 pm
King-shat says:
Again, smoke-my-pole would rather preach how the right guy has no chance instead of stumping for him so as to increase his chances. All while continuing to remind us of how gay he is.
Smoke-my-pole and his merry men of pole smokers
Didn’t he just list them yesterday?
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5 
1
27th October 2011 at 5:33 pm
Thinker says:
And then we have the idiots who think “inflating away the debt” is a possible solution. I take it they haven’t heard of Weimar Germany.
There Are Only 2 Ways to Save the Economy: Innovation or Inflation
In fairness, they do say they prefer innovation to spur economic growth, but we all know how that works with declining resources.
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27th October 2011 at 5:43 pm
Kings-AssHat says:
Plus, Smokey was VERY mean to Stuck and I the other days. He hurt my feelings very badly, and my shoes fell off.
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4 
0
27th October 2011 at 6:43 pm
Smokey says:
King-shat,
Take a look at how enormously volatile the republican race has been so far. Romney was favored heading into the Iowa straw poll.
Bachmann took the lead coming out of Iowa. She then fell steeply when Perry entered the race. Perry was instantly the heavy favorite and remained so until the end of his first public debate.
Next Herman Cain became the front runner by virtue of the idiotic 9-9-9 slogan he used in a debate that had a national audience of retards.
Romney, Bachmann, Perry, and now Cain. Everyone knows Cain will self-destruct. All it will take is for him to get caught in another half dozen lies, which means he has maybe another week as the frontrunner.
When Cain crashes, that leaves Romney, Gingrich and Paul. You can toss Gingrich because he has no chance.
It boils down to Romney and Paul. Normally, I’d give Romney the edge, but he fucked up pretty bad in the recent debate, losing his cool with Perry. VERY unpresidential.
King-Shat, it boils down to this. Your campaigning and carrying around posters does not help him very much. The mother’s milk of politics is money. Cold hard cash.
Cash will be critical from here out to Doctor Paul’s campaign. If you truly want to make a difference, send him every penny you can spare. If you have to borrow money or take out a second mortgage, by all means, do it. If you have to sell your car and use a bike, do it.
Ron Paul will certainly appreciate it and the country will be far better off from your unselfish efforts. It won’t take much for the Ron Paul campaign to reach the critical mass necessary to put him on top to stay. When he gets to the top, SOMEONE’S contribution will have been the one that put him over the top. It could be you who has earned that sacred honor.
Please donate generously to Doctor Paul.
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0
27th October 2011 at 7:12 pm
SSS says:
(spelling police whispering to Admin …….. it’s Niagara.)
What’s up with Turkey, India, and Indonesia dropping in their debt/GDP ratio? I get the Swiss angle, but those three? Anyone have a plausible explanation?
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1 
0
27th October 2011 at 7:13 pm
Dave says:
“Administrator says:
Dave
21 year recession in Japan.’
Then we have about 160% and 16 more years to go. The road is long, and the can is big.
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1 
0
27th October 2011 at 7:57 pm
Stucky says:
Smokey
That was fuckin hilarious. And you didn’t even say one potty word!
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3 
0
27th October 2011 at 10:53 pm
Novista says:
Dave
The temperate in Tokyo is 18C, forecast tomorrow 19C.
Air pressure at 1026 hPa, dew point 8C. Visibility 10k.
some cloud at 914m. Wind speed 15k from North.
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1 
0
27th October 2011 at 11:21 pm
ragman says:
dd: eat shit and die! What I learned at 20 was to stay in college so when I went to Vietnam it would be as a Navy or Air Force pilot and not a grunt carrying an M16. Things were different back in ’68 but I wouldn’t expect you or anyone else that didn’t live it to understand it. The Vietnam “war” and the draft absolutely ruled the lives of young men. This is not a whining, sniveling post….it’s simply the truth.
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27th October 2011 at 8:35 am