Source???
Can be traced back to Congress.
Yet nobody listens to me.
“I told you so” won’t cut it when it hits the fan.
$14 Tn in credit card debt?
What currency? CC debt has been going down recently. I don’t think it has ever been above $2 Tn, which is 15% of GDP.
We are having problems, to say the least, but I think you overstate their severity in near hysterical terms.
Makes sense to me.
You forgot to mention that FR has turned into an unmoderated hate-fest among members.
Money Funds a/o 12/23/08: $3,808 bn.
World GDP, 2007:$54,347.038 bn
For a nation of people to have things, they must produce things. Free nations must practice free trade in order to continue their freedoms. Manufacturing is real work. If you don’t don’t real work, eventually, you don’t eat.
I meant to write, free nations must practice fair trade in order to continue their freedoms. The practice of borrowing money from communist nations to purchase goods from those nations is a ticket to economic collapse.
TED spread?
You sound like you read too much KD over at Ticker Forum.
Either it’s hitting the fan, or it isn’t. I’ve worried until I can’t worry anymore. My business went down the tubes this year, and I was fortunate to take a big income hit for a job with a former customer. Oh well, it’s enough to pay the monthly expenses, which aren’t much by most people’s standards, apparently. A mortgage under $1K a month, house over half paid off, no other debt.
There are more important things, though. My dad passed away in April, and the holidays will never be the same.
I have no idea what the future holds, and have never been so pessimistic because it doesn’t sound good at all, but if you have your loved ones to gather close to you, it’ll be alright in the end.
The author identifies all of the key problems with the US economy, then through a leap of logic, claims the dollar will no longer be the world’s reserve currency. The fallacy in his logic is, he fails to identify what will replace the US dollar as the world’s reserve currency. The Ruble? The Peso? Surely not the Euro.
I don’t doubt the dollar will be debased. Chopper and Bazooka are doing everything they can to devaluate the dollar and stimulate inflation. But to jump from that to dropping the dollar as the world’s reserve currency is a massive leap of faith. I’m not buying it.
The word “hyperinflation” is tossed about casually by some people.
Not to say we don't have a lot of problems, because we do, but $14 trillion in credit card debt? That's total garbage.
There's currently about $2.5 trillion in outstanding consumer credit, of which just under $1 trillion is revolving debt (credit cards). The remaining $1.5 trillion is car loans, education loans, and other non-revolving loans. This amount is partly secured, in the case of car loans and loans given for the purchase of other products.
Now, there is about $14.5 trillion in mortgage debt out there, which is secured to an extent against the value of the real assets backing the paper. Without more accurate figures about the current values of the property backing that debt, it is impossible to say how much of that is actually secured.
IOW, credit card debt is about, what? 7 or 8% of GDP?
Barney Frank denies any involvement or blame.
Are you still breathing? Have a beer and chill. Hasn’t anybody ever told you that money and life are not the same thing?
And the politicians (demoncrats) taxing, taxing, taxing while they play, dine, and wine themselfes. Then like the idiots they are they tell the rich they will tax them even more.
Does the above make you want to disagree. You can you know, after all the companies holding the balance on you credit cards are holding worthless paper. It's legal to think about it. Then tell them once and for all how foolish they have been. (And yes we are foolish too for allowing this to happen.)
When the government declares war on economic growth, the economy crashes. The Fed incorrectly blames inflation on economic growth, so every ten years or so it inverts the yield curve, which chokes off funding for business. An inverted yield curve is the best predictor for recession there is. Combine that with a president who is an economic moron, and we find ourselves in a mess.
If the government corrected itself with stimulus for business (especially small business), instead of for the consumer (which has already failed a few times), this financial crisis would be over shortly at minimal cost.
But I'll guarantee it doesn't happen, because demand side stimulus, and infrastructure projects are what benefits politicians the most, not America.
actually you are missing one point.
It is not just the fact that these people are going to default.
There is no legal way to collect.
The “bad credit write off” market is not the court juggernaught as before. The standing of a subsequent holder of a debt is no longer certain.
For example, banks have literally LOST HUNDREDS OF THOUSANDS OF PROMISORY NOTES.
poof gone.
They are TRYING to allege state statutes to esablish the lost promisory note and offer absurd indemnifications agains a future holder of the note trying to enforce the note.
Now we have “rocket scientists” (dripping sarcasm there) who are pushing the concept of recourse mortgages on primary residences.
The forget the fact that primary residence homes enjoy HUGE legal preferences for the lenders and borrowers. If the mortgage becomes recourse just like any other investment, then lien stripping and priciple rewrite under the bankruptcy laws should also be allowed on the primary residence.
In the courts these days, nobody seems to be able to establish with certainty who is the proper plaintiff.
(footnote: this does not even begin to tough the 20% BAD INFORMATION ACCOUNTS where the collection agency bought a false account)
(footnote2: many of those bad credit card debts were bought for 7 CENTS or less, yet collection plaintiffs push the illusion they are the same as teh original company)
(footnote3: most of the debt conselor services are just glorified collection agencies in sheeps clothing. They get a percentage of every dollar paid to the other collection agencies on top the money the debtor pays. Also it does not help the credit rating the way advertised. Some credit agencies treat credit consolodator services the same as bankruptcy)