IMF And The Greek Chorus

Bill Gross says that the biggest bubble we are in is a bond bubble.  He is, of course, not quite right.  It is a bubble but isn’t the biggest bubble.  The closely related bubble that is far bigger and grew the fastest is the Derivatives Beast Bubble.  This hellish monster is based on all the monetary/debt bubbles and is why they were able to grow massively, flooding the planet with easy debt.  The tide seems to be changing as faith in the Derivatives Beast is fading after it ate up trillions of dollars in ‘wealth’.


ΩΩRight now, we are sailing past the many corporate and private defaults that has destroyed many trillions in dollars and are now entering the true danger zone: defaults of many sovereign nations.  The underpinning system here is the US dollar and the US government but these are leading the way to destruction as the US sucks down immense amounts of red ink.  Obama, this week, is doing what he promised he would not do: ask for ‘supplemental funds’ for our expanding wars.  $33 billion this time around.


ΩΩAn astonishing fund!  Again, the GOP tried to stop $7 billion from going to the unemployed working class, claiming we need to tighten our belts.  The IMF forces nations to do this but US warmongers run the IMF and a great way to take over the IMF’s top slots is to be a US war criminal who spends money like a literal fiend.  Of course, the IMF is also Home Base to all good Bilderberg conspirators.  It is virtually one and the same.


ΩΩWe will talk more about the IMF but first, some news:  EU, IMF Deal Reduces Greek Default Risk; Euro Rises – BloggingStocks

As expected, Germany and France resolved their differences and agreed to a Greece stabilization plan than includes a mix of both EU loans, and, if needed, International Monetary Fund loans.


Actually, before today, it was not all that expected which is why everyone was on pins and needles concerning who was going to do what the US did for AIG: pay for all the losses.


The euro rallied about 1.2 cents versus the dollar to $1.3390 on the news in Friday afternoon trading. Europe’s bond market took the action in stride with the interest rate on Greece’s 10-year bond dropping 6 basis points to 6.25% In comparison, Germany pays 3.27% to borrow money for 10 years.


Germany is content to see the euro drop in value.  At $1.6, it was killing Germany’s best foreign trade deals outside of the EU: exporting stuff to the US.


Under the deal worked out by German Chancellor Angela Merkel and France President Nicolas Sarkozy, each eurozone country will provide non-subsidized loans to Greece based on that nation’s stake in the European Central Bank, Bloomberg News reported Friday. Europe would account for about one-half the loans, and the IMF would issue the rest, and the plan would only take effect if Greece has no other fund-raising options.


ΩΩThe reason Greece needs these sorts of loans is, the open market sets a much higher interest rate on any lending and this lending has to come from some entity that has capital.  Now, an immense boatload of ‘capital’ in the form of FX values (ie: paper money) came from the Japanese carry trade.  Now that this has faded (thus, the ‘credit crunch’) few people are talking about this thing!


ΩΩI remember very clearly, years ago, trying to explain this business and seeing little interest in others.  The only people interested in this business were….the privateer pirates operating out of various Crown islands.  This was the greatest money making machine, ever, and they pumped it like crazy and lent money to anyone who signed the bottom line because the differential between any loans handed out and the super ZIRP loans from Japan were the easiest profits in history.


ΩΩAnd fatal!  Totally useless!  Destructive!  To insure this wouldn’t collapse, these privateers insured these loans with AIG and we know what happened: the US public got stuck with all the losses as we now are AIG, it is our entire nation.  So, the chances of Greece being forced to use IMF loans is about 100%…unless the Chinese decide, for geopolitical power plays, to be the banker of last resort before the IMF.  This is possible.  But so far, Greece hasn’t asked China.


UPDATE 2-IMF scrambles to figure out role in Greece | Reuters

The dilemma for the IMF is that Greece falls under the jurisdiction of European Union rules and is a member of the euro zone where monetary and foreign exchange policies are dictated by the European Central Bank.


That makes it difficult for the IMF to set policy prescriptions backed by its money….Analysts have said Greece could be allowed to borrow between 20 billion to 22 billion euros from the IMF. Greece would be the first country in the euro zone to borrow from the IMF, breaking new ground for the world’s lender of last restort.


ΩΩThe IMF always forces cuts in social services and pensions.  Usually, nations apply for aid after ravaging these via inflation as we saw in Zimbabwe.  A major German export to Zimbabwe for a while was Zimbabwe dollars which had to add zeros at an increasingly mad rate, even surpassing the infamous Weimar hyperinflation.  I would suggest Zimbabwe’s inflation would have ended sooner if the Germans didn’t support this by printing money faster than it devalued for a while.


ΩΩHere is the IMF back on the 18th of March:  Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, IMF

QUESTIONER: I will burden with one more on Greece. Next week on Thursday and Friday, it’s the regular European Union Summit. The finance ministers this week postponed any decision on Greece for the summit. Chancellor Merkel seems to be reluctant to go ahead with any kind of assistance. So the Greek prime minister speaking at the European Parliament today said although Greece prefers some kind of not financial assistance as you say, they’re not asking for it, but some kind of backup from the Europeans. If they do not get that at the summit, everybody agrees that the IMF is a possible or a potential solution.


Can you briefly tell us how does it work, assuming Greece in a week or 2 weeks at the beginning of April decides that it’s not working with the European Union and they want to go to the IMF? What’s the time –because we have loans that are running that have to be paid off– so how long does it take, and what’s the process if a country decides, like the situation of Greece, decides to come to the IMF?….


Basically, last week, no one knew if Greece could go to the IMF for loans.


MS. ATKINSON: If I can just repeat again that of course, we haven’t received any request for financial assistance; we are working closely with the E.U. Commission; and I believe we’ve often said that we expect the E.U. and the Eurozone countries to want to and to plan to resolve this question by themselves.


See?  Just last week, the IMF was refusing to do anything and was trying to force Germany to bankroll these loans because frankly, the US and UK can’t.  Yet both run the IMF at the top, for the most part.  And the IMF lends in US dollars and this has a strong effect on everything as I will look into later.


….QUESTIONER: Could it be like days? A year?


See the urgency of time here!  And the international reporters were very anxious for an answer.


MS. ATKINSON: If you look at our experience, sometimes we move very quickly and sometimes not. It’s not just whether we move quickly, it’s what the conditions are with the country.


QUESTIONER: We have been waiting for a mission date for the mission to go to Greece for technical assistance. Has a date come up yet?


MS. ATKINSON: I don’t think it’s a matter of just a single date because there are different teams on different issues. We have some people there now for instance who have been looking at the banking system, but it’s just a small team and it’s a different issue.


ΩΩThe entire IMF transcript of this press conference ran from one issue to another but the European reporters were very focused on a timeframe for the Greek bail out.  And we can see from the many questions (I posted only a little of this here) shows that there was great anxiety and this revolved around not only if the IMF would lend but when.  Only two days ago, did these things finally become clear.


ΩΩTime is money!  Dubai dropped its debt payments but refused to go bankrupt due to existing in a Muslim matrix which allows this sort of goofy thing.  The US is entangled in an immense mess due to wanting to glide over an army of US homeowners who stupidly used their houses as ATM machines and thus, went very,very deep into debt and now need to be bailed out.  You can’t bail them out, it is impossible.  The last bail out attempt at rewriting these debts had an over 50% default rate in one year!


ΩΩImpossible!  The nations going into debt are in a similar fix: too much debt that can only be escaped via bankruptcy.  And this is what a depression is all about: money ‘vanishes’ due to debtors unable to honor their loans.  Even if desperate matters are tried to keep things afloat, these fail due to too much debt which is why debt is not to be taken lightly: it is a dangerous brew, nearly a poison.  It works only if taken in smaller doses.  Guzzle it and you die!


Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, IMF

MS. WROUGHTON: I have a follow-up. Yesterday in Congress lawmakers were saying that the IMF should take a bigger role in trying to defuse the situation on the yuan. Are there any talks that you know of that are scheduled with the IMF to try or plans to try and intervene here in some way? That’s being the Fund’s role in financial stability– that’s coming in and being a mediator in how to fix this problem.


MS. ATKINSON: I think the global imbalances issues, which really this is a part of, is a very big and important issue which of course the IMF is working on and we’re working with our member countries. We have in the context of that frequently commented on the kinds of measures that we think are needed to rebalance demand both with more reliance on domestic demand and consumption in China and in some other countries. The surplus countries include Germany in the E.U., China in Asia and others, and then deficit countries also have to rebalance their demand. So this is part of a global issue. The Fund is obviously a good place to have those discussions. We make our views known and we have done that and continue to do that and I think that’s an important part of it. There is also the G-20 process, as you know, where issues of how best to support strong, sustainable and balanced growth going forward are very important ones for the G-20 ministers and leaders.


ΩΩAnd what is the engine of ‘global imbalances’?  HAHAHA.  There are three: free trade, the floating fiat currency regime and ZIRP lending!  This troika of economic horses have taken off at a fast trot and now are foaming at the mouth while being whipped along and are going lame.  When the ZIRP horse dies, all hell will break loose.  The drivers of this mad troika have kept the floating fiat currency dollar regime alive via feeding it ZIRP loans and holding excess dollars in FOREX accounts.


ΩΩDemanding China balance things when Japan has zero desire to do this is futile.  The Chinese won’t do it.  When I went to the IMF to see Japan’s FOREX holdings, it was well over  a trillion dollars!  Well, well, well.  China’s is even bigger, maybe twice as big!  But if we want no FOREX holdings to be bigger than the US holding which is now at $100 billion, then we have to set rules in trade and to do this, the US, which is the biggest trade deficit, by volume, than any nation on earth, must put up barriers to prevent trade.  Ahem.  We could kill the dollar (shoot the middle horse in the troika!) or we could pull on the reins and slow the troika down to a slow walk (global depression).


ΩΩWell, HAHAHA…the troika of horses DID slow down to a walk!  Due to lameness.  The IMF and the US want to have it run madly again because the international bankers loved the fast troika.  They loved the past.  I repeat: THEY LOVED THE PAST.  They want it back.  They do NOT want the present, the present is tolerable but no fun and dangerous.  They want the past.  Anyone saying otherwise is fooling themselves and their readers.  Ask anyone at the top of the economic pyramid.  They will tell you in no uncertain terms, they want the bubble back.  They want it to be forever and ever!


Pimco’s Bill Gross Says Bonds Have Seen Best Days (Update2) –

Excess borrowing in nations including the U.S., U.K. and Japan will eventually lead to inflation as governments sell record amounts of debt to finance surging deficits, Gross said. Pimco, which announced in December that it would offer stock funds for the first time, is advising that investors buy the debt of countries such as Germany and Canada that have low deficits and higher-yielding corporate securities.


Of course, the profits from holding safer debts is very little.  Everyone wants a big fat spread!  But the danger is, all of this is in DOLLARS!  If the dollar collapses into Zimbabwe territory, any spreads will be meaningless.  The loss of value will be faster than the gain in value by holding bonds.  This is a classic way countries get rid of government debt: kill the middle troika horse!


“Bonds have seen their best days,” Gross said in a Bloomberg Radio interview today from Pimco’s headquarters in Newport Beach, California. “We are focused more in spread space than in yield space. Durations should be shorter than index and you should be taking a little more risk in terms of spreads.”…


This is the increasing yawning gap not only between currencies, the value of government promises and future possible tax revenues but also, inflation.  The goddess of inflation can move faster than the speed of light, you can never catch up with her once she spreads her golden wings and takes off.  You can constrain her only at the very beginning, when she is nearby, not flying high in the heavens!


Zimbabwe’s inflation didn’t end until all value and wealth in the country was totally eliminated and people were literally starving to death. Same with Haiti.  All nations that fail to constrain inflation see the same thing.  Greece can’t use this to get out of debt which is why the other restraint, depression, is being applied.  The euro will be worth a lot but no one in Greece will have these euros and they will starve.


…“Real interest rates are moving higher,” said Gross, who co-founded Pimco, which manages about $1 trillion in assets. “That’s the main bear element in the bond market.”…

. …The U.S. budget deficit reached a record $1.4 trillion for the fiscal year that ended Sept. 30 amid falling tax revenue from the recession, a bailout of the banking and auto industries, and the $787 billion economic stimulus package. .

U.S. Treasuries have returned 0.9 percent this year, compared with 2.7 percent for German government bonds and 0.5 percent for U.K. gilts, according to indexes compiled by Bank of America Merrill Lynch….


And Germany is strong, not weak! The US and UK are both borrowing at near-ZIRP rates and as I noted in the past, the cheaper the credit, the deeper the debt. And the temptation to continuously roll over super-cheap debts instead of paying them off rises and eventually, the victim is stuck rolling an immense ball of debt forwards in time. And then, all it takes is a tiny, little, ittybitty rise in interest rates and the whole thing suddenly weighs a ton and can’t be budged and it rolls back and crushes the debtor!


…All Group of Seven countries, except Canada and Germany, will have debt-to-GDP ratios close to or exceeding 100 percent by 2014, John Lipsky, first deputy managing director of the International Monetary Fund, said in a speech March 21 at the China Development Forum in Beijing.


ΩΩAnd this is key!  Neither Germany nor Canada are in this fix!  The G7 are a miserable example to the rest of the world, far from being the ‘engines of the world’s economy,’ these are now, except for energy export power, Canada, which is more like part of OPEC, and the world’s great dynamic industrial power, Germany, deep in debt.  Below is the list of the G7:

  1. Canada
  2. France
  3. Germany
  4. Italy
  5. Japan
  6. United Kingdom
  7. United States

ΩΩNow, I went to the IMF to look at some statistics.  Instead of seeing the FOREX holdings, I went lower down in the listings to see what is going on in the predetermined short-term net drains on assets.  Back in the old days, the G7 was at $0 in these categories.  But in the last year, this has changed tremendously.  Except for the US.  We lost nothing but then, we hold nothing.  We are the middle horse in the international economic troika.


International Reserves and Foreign Currency Liquidity – UNITED STATES

ΩΩI greatly compressed the image for the EU data here due to it being very long in size and hard to fit without making it unreadable.  I wish the IMF staff would reset all their data so it is the same instead of having European data in this ungainly pdf form.  So, here is the UK statistics for net drains on foreign assets:

ΩΩWOW.  Talk about losses!!!!  Incredible.  The UK is in a lot of trouble here.  Losses of $13 billion?  $333 million in interest losses?  This is all new stuff, by the way.  I roamed around these IMF statistics for years and usually didn’t even bother looking at these boxes since they usually were around zero.  No more.  Here is Germany’s statistics:

ΩΩFar, far less than the UK.  London and New York wanted to be the world’s financial powerhouses, they wanted to be on top of the world.  The US fiat dollar makes it look as if we are on top but we are certainly not this, we went from being creditors to being debtors. And ZIRP loans, the decline in interest rates over the last 30 years has killed us as a creditor nation.  Now, onto G7 nation of Japan:  International Reserves and Foreign Currency Liquidity – JAPAN

ΩΩZero, again!  Earlier, we saw at the IMF press conference, the US reporters worried about the strong yuan.  They wanted this fixed.  And to fix this means going after ‘currency manipulators’ so to review who is what, here is a Fed Reserve graph that clearly shows how Japan manipulates the yen: St. Louis Fed: Series: JPINTDUSDJPY, Japanese Intervention: Japanese Bank purchases of USD against JPY

ΩΩThe plunge in 1998 is the Great Asian Currency Crisis.  But after that, Japan intervened increasingly often and at great amounts. Here, in contrast, is Japan manipulating the rupee versus the yen and dollar: St. Louis Fed: Series: JPINTDUSDRP, Japan Intervention: Japanese Bank purchases of USD against Rupiah

ΩΩNada, zilch until the Great Asian Currency Crisis.  Then, boom!  Japan bought USD against this particular currency.  To this day, few people can really understand how the Great Asian Currency Crisis started.  But I view it as a warning bell.  And Japan was very deep inside of this. Now, on to Canada:  International Reserves and Foreign Currency Liquidity – Canada

ΩΩLondon took more than twice as much in losses.  Italy has a much smaller financial base than London or even Canada so its losses were much less than London’s losses but still in the billions.   Here is Italy, one of the PIIGS:

St. Louis Fed: Series: ITINTDRES, Italian Intervention: Banca d’Italia Purchases of Foreign Exchange (Millions of ECU’s, Euros after 1999)

ΩΩBefore the Asian Currency Crisis, Italy had a crisis in late 1992.  Otherwise, it has to balance its books mostly with the euro and it is one of the PIIGS in today’s bad economic news.  Note that it is one of the G7 nations thanks to long-lost imperial powers.  Certainly, it is way outside of its league at this point and instead of expanding the G7 to a G20 or G100, it is time to drop Italy from this group.  If they want another ‘I’ nation in the G7, put in India.  And since China is one of the top 3 economies on earth, it certainly needs to be not part of the G20 but rather, this elite group.  After all, nearly everyone owes China money, anyway.  China certainly should have veto powers in the IMF.


International Reserves and Foreign Currency Liquidity – FRANCE

ΩΩFrance is also zero.  This is interesting and I can’t tell why it, the US and Japan are at zero here.  Especially since Japan and the US have very high government debt levels.  This is something we should examine more, later. I need more information.  I wish I could go to the IMF and ask questions at the press conferences in DC.


ΩΩOn to some side news.  One of the PIIGS nations is Ireland.  It is very odd, how everyone thinks entertainment systems and gambling can fix deep economic problems caused by too much easy credit!  This probably explains why the very last things built in Rome were not defenses nor schools but rather, public baths and more sports arenas:  Daniel Libeskind’s New Theater Opens, Offers Hope to Cash-Strapped Dublin

The opening this week of Daniel Libeskind’s new Grand Canal Theatre, a razzle dazzle production in its own right, threatened to upstage the gentle ballet on the building’s main stage. With its dramatic, four story glass facade, sharply angled roof line, and turbulent diagonal lines, the debut of Libeskind’s latest creation was a major cultural happening for Dublin, a city that’s been battered by the economy, and desperately needs something to cheer about.


And cheer they did. Ireland’s president, Mary McAleese, turned out for the Russian State Ballet’s performance of “Swan Lake,” along with Irish actor Brendon Gleeson (Hogwart’s professor “Mad Eye Moody” in the Harry Potter films) actress Rebecca Miller, and various other luminaries from sports, film, politics, arts, and business.


ΩΩALL PLAYHOUSES LIKE THIS ARE MONEY LOSERS!  They have to be subsidized.  They are immense fun.  The Romans had fun all the way up until Rome was totally destroyed by barbarians.  This playhouse is very stupid looking.  It will age very badly.  It probably was fun, making a solid building look like a drunk crashed his car into a house and then tried to fix it.  Maybe Mr. Kunstler, a guy who lives an arrow shot away from me, can make fun of this stupid building.  As someone who builds and fixes buildings, I can assure everyone, this new theater is a monstrosity for repairs and will not last very long.  It isn’t even like the famous Opera houses in Australia.  Those are solid.  This is all glass and metals and loosely connected.


ΩΩThe main thing here is, Dublin is in trouble for trying to be a pirate cove.  This failed.  Now, they want to be entertainers?  HAHAHA.  The US boasts about how we can use Hollywood and Las Vegas to get out of our own hole.  It isn’t working.  Not at all.  Much of this loses money. Everything isn’t a block buster.  And Harry Potter books can’t save England from economic and financial collapse, either.  Even if you tax Hogwarts at a 98% rate.  Plus taxing the bats.

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Filed under .money matters

17 responses to “IMF And The Greek Chorus

  1. This fellow has exposed a Silver/gold price manipulation by JPM & hsbc , was just involved in ‘accident’.!


    ELAINE: Time for more funny paranoia. Good lord, in this universe of the paranoid, there is no such thing as accidents nor random chance.

  2. nah

    the funky system of credits is unrepairable… yet fortunately everyone who is anyone wants to trade into this system all be damned
    so its now the only game in town
    it will be strange to see if global subsidy’s for billionaires account ballances will lead to real value getting to the general public ‘small business’…. or if they will just use their unjustified power to bend the rule of law to destroy us all
    as i have seen the facts play out the fortunate frequently abuse their position and power to prevent change and idolize themselves ‘even if noone really wants to care as its more dificult on the bottom line’
    you need money to make money… and more and more you need broken laws to break the law… the challenges for central banks go straight to the authority of the economy and capitolism vs bogus numbers on a 8×11
    personally i think we are getting robbed in broad daylight so we can go out and buy ipods
    no really fake it this time, mean it

  3. tts

    Very minor correction.In respect of Japanese purchases you mention rupee instead of (Indonesian rupiah) in your text.The rupee is the currency of India/Pakistan/Mauritius/Sri Lanka/Seychelles.That graph is rather puzzling:why would Japan buy USD not against its own YEN but against a third party
    currency such as the Indonesian Rupiah?


    ELAINE: Sorry, the Fed Reserve graph wasn’t very clear about which ‘rupee’ this was! Thanks for the clarification! As for why the Japanese operate this way: exactly. Why do they do this?

    The yen has been allowed to hide in this closet. Japan became the world’s #2 economy with a currency that basically was hidden from view and not used as a major world trade currency until…2007. When China forced it out of the closet. We should thank the Chinese for doing this.

  4. payAttention

    Dammit, someone else got here and caught the Indonesian rupiah snafu ahead of me. Apparently the Coryphaeus of Science got a little mixed up with her currencies, in keeping with the Greek choir theme. As for why, Japan has a fantasy of developing Indonesia into its export market. They give huge foreign aid subsidies, are responsible for twenty percent or so of foreign investment and built the modern Jakarta. If the rupiah crashes, the Japanese are out ten billion or so, but more importantly, a huge consumer market.

    Now back to the point that I have been attempting to explain for months now, without any effect. When a dessicated vampire like Bill Gross starts talking through those coked out nasal passages about any country’s bonds, it is time to freeze all cross border cash flows. While Dearest One has an inkling of Canada’s oil potential, it comes at a heavy price. This is not Nigeria or Arabia, where you can hit the sand with a mattock and oil comes squirting. This is heavy tar, that has to be processed in situ, by driving compressed steam through the bottom layers. The unfiltered runoff goes right into the ground water. Wonder if they are still going to build a nuke plant to power the steam generation. Never mind the ten gallons of water that it takes to produce one gallon of crude. Dear Author does not care, but you should Ziff House.

    Additionally when Vampire Bill comes knocking with Bernanke fake bucks, you can get ready for two million town houses in Toronto. I guess Vancouver can expect three. But with the MBA cowboy Harper and Flaherty, that is a good thing. Welcome to indentured indebtitude Ziff.

    It is only my opinion the Bill Gross is an old vampire and that his speech and nostrils are indicative of prolonged and habitual abuse of powdered cocaine, and in no way a statement of fact that could be construed as libel.


    ELAINE: You make constant mistakes but if I have a slight error, you go nuts. HAHAHA.

    The tar sands is terrible stuff. It is very destructive to the entire planet. It should NEVER be processed this way. Pure poison. Forget the CO2 stuff, it is, by itself, a destroyer of all life.

  5. Actually, the last things Rome built were not coliseums and theatres, but churches and monasteries, to house an ever larger parasitic class of priests, nuns and monks who ALL devoted themselves to ‘God.’ And were not taxed.

    (Same site)/cost.html


    ELAINE: Actually, no. In Italy, churches were not built until the one in Ravenna which was under the control of Byzantia at that time and it was after 700 AD this was done. The last thing the Roman GOVERNMENT built was these public baths!

  6. Gus

    The Most Important Chart of

    Debt Saturation Phase


    ELAINE: What an ugly web site! Generally speaking, I avoid the black background sites like the plague but this one takes it to a whole new level of difficulty reading!

    As for the graph: the Fed Reserve has a similar graph as I posted here. Yes, we are rapidly approaching debt saturation and unlike Japan that had a big trade surplus to keep things capitalized, we have all deficits in all areas all the time which is totally different from deep in debt Japan.

  7. Billibaldi

    Slightly off-topic, Australia’s most iconic building, the Sydney Opera house would make a good topic for a an opera itself. It cost 14 times the original estimate and it has cost the same again to repair and maintain the building. Part of the reason for the cost, is the colourful nature of the politics of Sydney.

    It is a bit of an engineering nightmare since it is built at sea-level with the basements below sea-level. You will appreciate the implications for costumes and scenery.

  8. emsnews

    But at least it has some solidity compared to any of the recent buildings being put up which are pasted together in odd ways that are structurally very unsound over 100 years time. I have fixed houses more than 200 years old. None of these new buildings will last as long as the Empire State Building, for example.

    And yes, the opera houses cost a pretty penny, too. To run and maintain, this is always considered a loss operation. Running these things require lots and lots of fundraising with rich people.

  9. Frederick N. Chase

    Yes, Gus, it would be better if people understood more about marginal productivity of debt. That chart looks like it is the result of a lot of careful effort, but I think there is a better discussion of it.

    Antal Fekete wrote THE MARGINAL PRODUCTIVITY OF DEBT exactly a year ago. He said “The key to understanding the problem is the marginal productivity of debt, a concept curiously missing from the vocabulary of mainstream economics. Keynesians take comfort in the fact that total debt as a percentage of total GDP is safely below 100 in the United States while it is 100 and perhaps even more in some other countries. However,….”

    You can find it at his web site.

    Or, I put a copy of his paper on the web with my markups and one of his references.

    I would simply put a click/URL here, but I don’t know how to. (It’s unusually long.)

    However you can find it by googling exactly this:

    $116.48 fekete


  10. Shockuhzulu

    More good economic news for America-haters:

    But as a friend of mine likes to say “Who cares?”

  11. Dibbles

    Mostly on-topic.

    On Friday I came across this:

    JP Morgan, Lehman, UBS Alleged as Conspring to Cheat Municipalities on Investments

    And still precious few frog-marches.

    From Saturday:

    EU Willing to Sacrifice Hedge Fund Jobs to Clean Up Industry

    It appears that some around the globe are thinking of their citizenry (darn socialists).
    Representative government sure has gotten selective in who gets represented and who pays the debt (clearly not those who created it).


    ELAINE: Yes, I saw that news. Have been too busy taking care of very ill mother in law and this eats up lots of time because I have to go to the hospital to do this.

  12. Colin

    “And were not taxed.”

    I agree that constantine is resposible for destroying the roman empire and i do blame his tax policies, but for a different reason. I believe, it was his ludicious 17% tax rate on small-hold farm land that finished the empire off. The taxes where so high that most of itally’s farmers abandoned their farms to avoid paying it. Even changing their names to avoid being caught. Much of itally was then left to go fallow; causing the population to rappidly decline. (the small hold farmers where most important because their allotments where on the edges of the cities and provied much of the city dewellers day to day food.) … Which was a double whammy as northern europeans had just invented the Heavy Plough, alowing their populations to massively expand.


    ELAINE: And these were war taxes.

  13. PLovering

    The Great Reneger

  14. if

    Sultans of Swap
    ACT III – The Getaway!

  15. tio

    “To this day, few people can really understand how the Great Asian Currency Crisis started. But I view it as a warning bell. And Japan was very deep inside of this.”

    It’s a puzzle all right. The above postulates high-rates/hot money/leverage mixed with crony capitalism/marginal productivity producing the bubble, also thrown into the mix is China edging out the rest of Asia. But there is no mention of Japan in the above link and I am, as always, very interested in your take Elaine (should you feel inclined) 😀

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