Monday, April 25, 2016

Trying To Bolster The Economy
By "Pushing On A String"
Egon von Greyerz sees how more & more debt is being required to get the same increase in economic growth: "Since 1982 more than $1 of debt has been required to create $1 of GDP growth. Today $3 dollars of debt is necessary to produce $1 of GDP growth. In economic terms this is called the law of diminishing returns. In layman’s terms this is like pushing on string or to put it frankly, the U.S. economy is on the road to perdition. Here is the most indebted country in the world, which is only standing because the dollar is the reserve currency of the world." .. on the U.S. debt challenges: "The U.S. is also a country which hasn’t had a real budget surplus since 1960 is living on borrowed time, especially since debts are increasing exponentially with no chance whatsoever for the American people to ever repay or honor the $300 trillion of total liabilities (including unfunded liabilities). This means that every American is on the hook for 'just' $1,000,000 each. As Japan, China, Saudi Arabia and Russia sell their U.S. treasuries’ holdings, there will be no way out for the U.S.. This will be the most spectacular of any sovereign insolvency that the world has ever faced."
LINK HERE to the article

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