This is a good article, even though I disagree with the politics and the objective of the writer. But he summarizes our economic problem nicely: Consumer Household Debt.
With the level of personal debt this high, the consumer has no interest or ability to buy more stuff. He's maxed out to his eyeballs.
This is why there's no "velocity" of money through the economy. This is why there's no inflation. Joe Consumer can't get a loan, and he doesn't even want a loan. He's trying to start paying down his debt and saving money for another rainy day. He's now living his life like a tight-fisted Japanese consumer.
Meanwhile, Bernanke is desperately trying to create inflation, or at least prevent a deflationary spiral that will cause another Great Depression. He wants Americans to think he can make the dollar valueless, so they will rush out and buy equities and more "stuff" they don't need, which will ultimately drive the economy.
Bernanke would love to monetize the debt, so he can make $16 trillion in national debt worth $8 trillion, and cut consumer debt by 50%, all through the magic of inflationary money printing. But every time he tries to print more money, other countries simply follow him, so they don't end up with a strong currency and a trade disadvantage.
Just remember, anybody talking about "inflation" is probably another huckster who is trying to sell you gold. We are re-living the 1930s, except this time, we have Fed Stimulus.
GEOPOLITICS PART 1 ; Seeded by Lets look at the facts
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"Like nearly all of the peoples of North and South America, most Americans are not originally from the territory that became the United States. They are a diverse collection of peoples primarily from a dozen different Western European states, mixed in with smaller groups from a hundred more. All of the New World entities struggled to carve a modern nation and state out of the American continents. Brazil is an excellent case of how that struggle can be a difficult one. The United States falls on the opposite end of the spectrum.
The American geography is an impressive one. The Greater Mississippi Basin together with the Intracoastal Waterway has more kilometers of navigable internal waterways than the rest of the world combined. The American Midwest is both overlaid by this waterway, and is the world's largest contiguous piece of farmland. The U.S. Atlantic Coast possesses more major ports than the rest of the Western Hemisphere combined. Two vast oceans insulated the United States from Asian and European powers, deserts separate the United States from Mexico to the south, while lakes and forests separate the population centers in Canada from those in the United States. The United States has capital, food surpluses and physical insulation in excess of every other country in the world by an exceedingly large margin. So like the Turks, the Americans are not important because of who they are, but because of where they live."
Read more: The Geopolitics of the United States, Part 1: The Inevitable Empire | STRATFOR
"We have already discussed in the first part of this analysis how the American geography dooms whoever controls the territory to being a global power, but there are a number of other outcomes that shape what that power will be like. The first and most critical is the impact of that geography on the American mindset.
The formative period of the American experience began with the opening of the Ohio River Valley by the National Road. For the next century Americans moved from the coastal states inland, finding more and better lands linked together with more and better rivers. Rains were reliable. Soil quality was reliable. Rivers were reliable. Success and wealth were assured. The trickle of settlers became a flood, and yet there was still more than enough well-watered, naturally connected lands for all.
And this happened in isolation. With the notable exception of the War of 1812, the United States did not face any significant foreign incursions in the 19th century. It contained the threat from both Canada and Mexico with a minimum of disruption to American life and in so doing ended the risk of local military conflicts with other countries. North America was viewed as a remarkably safe place."
Read more: The Geopolitics of the United States, Part 2: American Identity and the Threats of Tomorrow | STRATFOR
BEHOLD THE HOUSEHOLD; Seeded by Hugh Everett
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This is a good article, even though I disagree with the politics and the objective of the writer. But he summarizes our economic problem nicely: Consumer Household Debt.
With the level of personal debt this high, the consumer has no interest or ability to buy more stuff. He's maxed out to his eyeballs.
This is why there's no "velocity" of money through the economy. This is why there's no inflation. Joe Consumer can't get a loan, and he doesn't even want a loan. He's trying to start paying down his debt and saving money for another rainy day. He's now living his life like a tight-fisted Japanese consumer.
Meanwhile, Bernanke is desperately trying to create inflation, or at least prevent a deflationary spiral that will cause another Great Depression. He wants Americans to think he can make the dollar valueless, so they will rush out and buy equities and more "stuff" they don't need, which will ultimately drive the economy.
Bernanke would love to monetize the debt, so he can make $16 trillion in national debt worth $8 trillion, and cut consumer debt by 50%, all through the magic of inflationary money printing. But every time he tries to print more money, other countries simply follow him, so they don't end up with a strong currency and a trade disadvantage.
Just remember, anybody talking about "inflation" is probably another huckster who is trying to sell you gold. We are re-living the 1930s, except this time, we have Fed Stimulus.
GEOPOLITICS PART 1 ;
ReplyDeleteSeeded by Lets look at the facts
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"Like nearly all of the peoples of North and South America, most Americans are not originally from the territory that became the United States. They are a diverse collection of peoples primarily from a dozen different Western European states, mixed in with smaller groups from a hundred more. All of the New World entities struggled to carve a modern nation and state out of the American continents. Brazil is an excellent case of how that struggle can be a difficult one. The United States falls on the opposite end of the spectrum.
The American geography is an impressive one. The Greater Mississippi Basin together with the Intracoastal Waterway has more kilometers of navigable internal waterways than the rest of the world combined. The American Midwest is both overlaid by this waterway, and is the world's largest contiguous piece of farmland. The U.S. Atlantic Coast possesses more major ports than the rest of the Western Hemisphere combined. Two vast oceans insulated the United States from Asian and European powers, deserts separate the United States from Mexico to the south, while lakes and forests separate the population centers in Canada from those in the United States. The United States has capital, food surpluses and physical insulation in excess of every other country in the world by an exceedingly large margin. So like the Turks, the Americans are not important because of who they are, but because of where they live."
Read more: The Geopolitics of the United States, Part 1: The Inevitable Empire | STRATFOR
PART 2
ReplyDeleteSeeded by Lets look at the facts
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"We have already discussed in the first part of this analysis how the American geography dooms whoever controls the territory to being a global power, but there are a number of other outcomes that shape what that power will be like. The first and most critical is the impact of that geography on the American mindset.
The formative period of the American experience began with the opening of the Ohio River Valley by the National Road. For the next century Americans moved from the coastal states inland, finding more and better lands linked together with more and better rivers. Rains were reliable. Soil quality was reliable. Rivers were reliable. Success and wealth were assured. The trickle of settlers became a flood, and yet there was still more than enough well-watered, naturally connected lands for all.
And this happened in isolation. With the notable exception of the War of 1812, the United States did not face any significant foreign incursions in the 19th century. It contained the threat from both Canada and Mexico with a minimum of disruption to American life and in so doing ended the risk of local military conflicts with other countries. North America was viewed as a remarkably safe place."
Read more: The Geopolitics of the United States, Part 2: American Identity and the Threats of Tomorrow | STRATFOR