Posted on 09/23/2011 6:04:20 PM PDT by Diana in Wisconsin
Remember the mantra that "consumers have delevered" which has been run over the last two years as an incessant bark from the media, attempting to goad you, the consumer, into more spending and more consumption to "lift the economy."
This claim has been a lie and a fraud upon the public and the new Fed Z1 makes this clear. The peak household credit liability was $13.92 trillion. It currently stands at $13.30 trillion, a reduction of a mere 4.6%.
This all came from home mortgages going ka-boom; $10.6 trillion to $9.9 trillion, a reduction of $700 billion. Total net reduction in liability was $620 billion; ex-mortgages consumer leverage has actually increased.
The DAX is now down nearly 10% in two days and the rest of the global markets are reacting in the same sort of fashion. This should not surprise; the same mantra of "we've de-levered" and "cash is at all time highs on the sidelines" has been claimed for years, and it's the worst sort of half-truth.
See, cash is indeed at high levels. But debt has gone higher, and yet nobody mentions the liability side. As an example non-financial business credit stands at $11.02 trillion, just barely down from the 2008 high of $11.15 trillion - and nearly a clean double from the year 2000 level of $6.21 trillion.
There's been no material "de-levering" at all. In fact the World Economic Forum claimed that in order to hit the "expected" GDP growth numbers we would have to double outstanding credit - that is, add $100 trillion in the next ten years.
(Excerpt) Read more at market-ticker.org ...
Ping for your Morning Coffee...but you and I already knew all this... :)
Now recognition of that fact is dawning on people in a convulsive fashion, and markets of all sorts are reacting as one would expect when their entire worldview is exposed as having been a gigantic and intentional pyramid scheme constructed of debt layered upon debt that cannot be paid down. The wrong thing was done in 2008 and there is zero evidence that our government has changed one iota in their singular focus on misdirection and lies in this regard.
Welcome to awareness; I hope you’ve taken the last couple of years to become prepared.
I hold to my belief that there will be, in effect, a jubilee -- people just won't pay. A massive default at all levels, and the world will just give up trying to collect. It will be an awful mess, but it will clear away the debt, and people will rebuild the global economy, hopefully on sounder footing.
well, I am too stupid to understand this article. But I knew they never should have sunk all that money into the economy in 2008.
That was a fraud and I wouldn’t be at all surprised if the current administration was neck deep in causing whatever happened.
The peak household credit liability was $13.92 trillion. It currently stands at $13.30 trillion, a reduction of a mere 4.6%. This all came from home mortgages going ka-boom; $10.6 trillion to $9.9 trillion, a reduction of $700 billion.
No amount of preparedness will defeat the zombie horde. Too many people, not enough empty space (that isnt freezing that is).
http://www.youtube.com/watch?v=1OZ0mu8Ey6A
Man, I hope you’re right.
Yes, this is going to be ugly folks.
1934 is a good model of where we are headed. The central banks cannot push enough money...because money is debt and there is no more room for debt in the USA or elsewhere.
Buy and hold cash.
The for sale sign is going out on the front lawn tomorrow morning.
Nice single level ranch for sale in a nice, quiet neighborhood, $419,000
I owe 200,000 to the BOA A-holes and have 219,000 in supposed equity, .
Hopefully some sucker buys it quick before the S REALLY HTF.
after the realtor, feds, state and local anally rape me and after i pay off my other debts i may have half of the equity left over for some dumpy apartment somewhere.
What a frigging waste of my life, never missed a payment in 20 years and now it’s over.
ugh
House for sale to all you interested freepers!!
Oh yea, it’s in MA though.
sorry bout that.
bump for reference
I’ve had a similar question running through my mind recently. What would happen if you lined up every dollar of debt held by other nations and started doing cancellations of one against another. I have 2K in italian debt italy you have 2k in my debt lets cancel them out. poof we both just improved our balance sheet by 2k....if govts had balance sheets..as though they practiced GAAP lol haha lol oh it’s so funny it hurts...maybe I just answered my own question, but at the least it would simplify the situation.
That looks like a really cool show.
What is pretty funny is people here on FR pimping for Herman Cain who worked for your overlords - The Federal Reserve.
Me, too. Short on gold, long on silver. But Hells Bells! I was GOING to sell at $1200.00/oz.
Looks like I may have a chance to revisit that again, LOL!
On the positive side, you will be unhitching yourself from an obligation that limits your mobility. Without annual appreciation, many of the arguments for buying fall by the wayside. The equity you have right now is likely the most you’ll have for several years to come.
I bought my first house in 1993 and still have it, intended to keep it as a rental after I built my dream house on a lake. Long story short, I was forced to sell that one a year after it was finished, actually made a little profit, only due to having bought the land well before cheap money drove it up.
I paid $92,500 for it, 3/2 ranch, acre and a half, 1500 sf. Could have sold it in 07 for 155k, would be lucky to get 135 for it now. Mostly paid for though, but even that doesn’t approach your 219k, so count your blessings.
I don’t really see any other way out of it.
This hole is so deep and so black, it’s unfathomable by the average brain.
However, I’m still willing to let people pay me a wheelbarrow full of bullion for a dozen eggs or a loaf of homemade bread.
*SMIRK* :)
Buy and hold cash?
Can you sell me some at discount prices?...Or I could trade you for some dehydrated water.
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