[RE]

Stupidity like this makes my head do Exorcist spins.

Even if it was true, the household wealth isn't fungible.  You would need to find a buyer for it.  Who is going to buy all this stuff at whatever the market price you value it is?  In a firesale of these assets, the price will drop like a rock.  Besides that, $34T is just the Federal debt.  We also have FSoA Household debt and Corporate debt.  Household debt is $17.3T, corporate is $10T.  Add that all up, you're at around $60T.

So, if you were to pay off the debt, you would need to sell assets to get the money to pay it.  What's the total FSoA money supply?  As of 2023 Q3, it was at $20T.  There isn't enough money around to buy even 1/2 of the total debt around.  To get more money, you would need to take out more debt, that's what the money is.  The FSoA would need to sell more USTs, thus raising the debt.  You can't win at this game.

Nevertheless, you have Fed economists who say stupid shit anyhow.

https://www.businessinsider.com/us-debt-household-wealth-federal-default-deficit-interest-rate-costs-2024-1

Don't worry about US debt because household wealth is 4 times bigger, former Fed economist says

RE

[RE]

Even more than Peak Oil in 2018, the hopeless condition of global debt brings the Day of Reckoning, better known on these pages as SHTF Day, into ever closer proximity.  As Nicholas Taleb puts it:

"...We need something to come in from the outside, or maybe some kind of miracle...This makes me kind of gloomy about the entire political system in the Western world."

Since I don't believe in Miracles, I am quite certain the rapidly ballooning debt bomb is going to blow quite spectacularly, and just as lights won't function once the electricity stops flowing, just about all economic activity will cease when the smartest guys in the room can't shuffle the deck of debt anymore.  It's a game of musical chairs where everyone can keep playing as long as the music is going, but when the music stops they'll find 10 chairs to sit on with 100 running around in the circle.

About the only thing I quibble with here is the "Western World" limitation, because there is no real separation between East and West any more,  Globalism got rid of that.  Political systems will crumble everywhere at anything above the tribal or town size level where people can actually gather together in a room and figure out together what they are going to do to hold together.

This doesn't mean imminent extinction any more than Peak Oil does, it just means that every system we have will have to be rebuilt from the ground up.  In that sense it's a great opportunity.  If it wasn't for the fact millions of people will starve, it would be unequivocally a good thing.  Our current systems are so hopelessly corrupt there's no fixing them individually and piecemeal.  It's all too interconnected for that.

The FSoA Debt Bomb is the biggest of many big bombs ready to blow, and serves as a lynchpin for all the others.  The Day of Reckoning draws near.

https://dailyhodl.com/2024/02/10/201000000000-piled-onto-us-national-debt-in-one-month-as-black-swan-author-warns-america-facing-financial-death-spiral/

$201,000,000,000 Piled Onto US National Debt in One Month As Black Swan Author Warns America Facing Financial 'Death Spiral'

RE

[monsta666]

When you state the payment on interest alone has reached $1 trillion a year that is a staggering figure. Makes me one wonder why this didn't grab more headlines. I think the issue here is as one gets closer to an active volcano the more one gets blind to its dangers and effects. We are currently in that twilight zone.

Saying that, for all the US's financial woes they are the best horse in the barn. If you are not satisfied with the stability of the US dollar, where do you invest your hard-earned cash? Is it on assets, EURs, RMBs or pound sterling? To avoid being eaten by the bear you don't have to be faster than the bear. You only need to be faster than the slowest person running from the bear. Who will the bear eat first? That is the big question!

[RE]

To avoid being eaten by the bear you don't have to be faster than the bear. You only need to be faster than the slowest person running from the bear. Who will the bear eat first? That is the big question!

Works with bears who hunt alone, but not with pack hunters that go after whole herds.  The pack will surround and stampede the herd to a cliff and drive them over it, then feast on all the animals with broken  legs.  In this case, the herd animals are the currencies, and the pack hunters are the Bond Vigilantes.  The whole bond market is likely to collapse, not just USTs.

RE

[RE]

The magic of compound interest and the exponential function.

Anybody up for a game of street hockey?  We have the stick.



High sticking allowed for Da Goobermint.

https://www.cnbc.com/2024/03/01/the-us-national-debt-is-rising-by-1-trillion-about-every-100-days.html

The U.S. national debt is rising by $1 trillion about every 100 days

RE

[RE]

tick toc, tic tok.

https://watcher.guru/news/brics-bank-of-america-issues-warning-of-us-dollar-collapse

BRICS: Bank of America Issues Warning of a US Dollar Collapse

RE

[RE]

The Bond Vigilantes have awoken!

The market for USTs is in freefall, and unless Da Fed can magically conjure up a buyer for the massive number of bonds they need to issue to keep rolling over the debt, things could go south in a very big hurry.



Add to this the fact that the M2 Money supply has dropped over 2% for the first time since the Great Depression, and we're looking at a Perfect Storm of economic indicators FLASHING RED as we move toward the 3rd Quarter of 2024.  As you recall, my prediction was we would see financial mayhem arrive at this time.

Going into the POTUS election of course, this bodes ill for Uncle Joe, which means we will have The Donald in charge of keeping the Titanic floating after hitting the iceberg.  I think that about guarantees the same result.



https://finbold.com/u-s-economic-apocalypse-imminent-government-debt-market-collapse-begins/

U.S. economic apocalypse imminent? Government debt market collapse begins

RE

[RE]

The article sez Private buyers are "stepping in" to buy he USTs the Chinese no longer want.  Which maybe they are to an extent as long as the interest rates stay high, but even with high interest rates there's no way the private sector can absorb a full-on dump of USTs by the Chinese if/when they choose to do so  They simply hold too much of this Toilet Paper  Right now they're dumping in slow, measured amounts because a full on dump would crash the market.

It's just a matter of time because Everybody Knows this debt can't be paid, at this point even just the interest on the debt is greater than the miiitary budget.  All the Chinese are doing is biding time until they have the BRICs currency and a replacement for the SWIFT payments system fully in place, and ste by step, that's coming to pass.

This is the real Sword of Damocles sitting on top of the whole global geopolitical battle, the only unknown is when it will blow.  It may just evolve, or there may be some geopolitical trigger.  Either way, that's when SHTF Day arrives.

https://unherd.com/newsroom/chinas-record-us-debt-sale-threatens-western-alliance/

China's record US debt sale threatens Western alliance

RE

[RE]

Decent explanation of why we're drowning in debt and why the rich are getting richer and the poor poorer, but though understanding the problem is the first step necessary to solve it, how to solve this except with a total economic collapse isn't explained.  Of course you need debt forgiveness, but "wealth" of the rich IS the debt of the poor.  Every dollar of debt on J6Ps balance sheet is a dollar asset of the balance sheet of some rich scumbag who has some securities or bonds in his portfolio he collects the interest J6P pays.  The TBTF Banks and Federal Reserve are just the intermediaries between the borrowers and the lenders, who collect on the spread, the difference between the interest they pay to borrow money vs what they charge to loan it out.  Wipe out the debts, you wipe out the assets with them.

Add to this also the fact the debt has been rehypothecated many times over, where debt is used to buy one asset which then is used as collateral for debt taken to buy another asset...rinse & repeat % or 10X over.  Anywhere in the chain somebody goes bankrupt the whole house of cards comes tumbling down as the creditors demand assets be liquidated to pay debts.

Once the cascade gets rolling, liquidating assets to pay of the debt becomes increasingly difficult, as you can't find buyers for them.  An office building sold 6 years ago with a $250M mortgage on it goes at auction for $1.5M.  The other $248.5M is a loss the bank has to write down.  Except the bank doesn't have $248.5M of its own money, it only has 5% of that.  The rest is money that has been loaned to the bank in the form of deposits.  When the bank goes belly up, depositors lose the money, except for $250K each covered by the FDIC.  All the rest of the debt goes into the RTC, the Resolution Trust Corporation.  This is a massive "Bad Bank", where unfunded liabilities from bankruptcies gets dumped.  Like Lifetime Pensions from bankrupt biznesses.  Pensioners then have their pensions slashed.  Exactly where the RTC gets money to pay out anything at all is something I have never been able to figure out.

So anyhow, because nobody really knows how to exit this loop without causing a massive crash, they keep on tryin to loan out more money, but find it increasingly difficult to find credit worthy borrowers.  Interest rates rise, you get your crash anyhow.  That's where we are now.  It's coming, Everybody Knows.
[/i]

https://www.analystnews.org/posts/how-our-global-addiction-to-debt-has-widened-inequality-hacked-democracy-and-crippled-the-world-economy

RE

[K-Dog]

A long article it will take a while to digest.  A prime candidate for some dynamical analysis.  I am busy embedding the original Dynamo users manual under a book icon now.  I have to generate the all text from images.  A lot of work but it is an elegant way to document what the software will do.

But everything we've spoken about has focused on this kind of boom-bust cycle; what I've been doing over the last few years is asking a deeper question, which is why are we in this situation in the first place? Think of the good times before a recession. Why did we have to rely on debt to generate demand? Why do we need to borrow in the first place? You can talk about being lenient on consumers in times of collective trouble. But why do we get ourselves into that situation in the first place? If your economy is going into these crises repeatedly and seems to be addicted to debt, we have to ask what's going on.

Model it in equations and see what happens with different policies.

[RE]

Model it in equations and see what happens with different policies.

One policy I would like to see is limiting the legal length of residential property mortgages to 20 years.

After WWII, the typical mortgage was 15 years and the price of a home 3X the average annual salary.  Today, mortgages are 30 years, and the price is 5X an average annual salary.  A Generation is usually about 20 years, the Boomers for instance were born between 1946-1964.

Shortening the length of time reduces the risk of your financial circumstances being significantly changed in either direction and makes the length of time you might own a home closer to how long you are paying it off.  Climbing the ladder and getting richer, you want to move to a more luxurious home, getting laid off and having to take a lower paid job you need to downsize.

This would limit the risk of people buying more house than they can really afford, when you take into account all the crap that can happen in an economy and people's lives over 30 years.

Next policy that is important is if the Private Sector builders are not building Starter Homes for first time buyers, the Goobermint should be building them.

Builders say the combination of land, labor, and material costs makes affordable homes impossible, and only more expensive models offer enough of a profit margin.

Not building them at all is simply not a viable option.  It just results in homelessness.    If it has to be subsidized, so be it.  Capitalism doesn't provide a viable means of making a profit from building affordable houses.  The Builders themselves say this.

These two policy changes IMHO would go a long way toward resolving the homeless crisis.

https://archive.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill

RE

[K-Dog]

Not building them at all is simply not a viable option.  It just results in homelessness.    If it has to be subsidized, so be it.  Capitalism doesn't provide a viable means of making a profit from building affordable houses.  The Builders themselves say this.

Americans are patriotic and will happily experience homelessness and deprivation before they see any issues with the system.

3000 square feet new homes are selling for two million a mile from me.  These homes are 8x the price what they would have been forty years ago here.  Totally unaffordable except for the greedy skim the cream off the top capitalist.  Most fools call this progress.  And it has been for decades, Affluence moves in and drives the locals away.  It is an old American story.  It is the American progress fable.

Most Americans would flip out if they knew how many Chinese nationals are moving in to keep the price up.  I'm not going to tell them.  What goes around comes around.  It would be fitting if the new Chinese lions were replaced by concrete buffalo at the end of the driveways.  The joke would be so subtle most people would not get it.

 

This will be Seattle in 20 years. 

You will not have to ask where Chinatown is. 

Noah Cross: Exactly what do you know about me? Sit down.

Jake Gittes: Mainly that you're rich, too respectable to want your name in the newspapers.

Noah Cross: Of course I'm respectable. I'm old! Politicians, ugly buildings and whores all get respectable if they last long enough.

From the movie, Chinatown.  Noah Cross is an average guy now.  What goes around comes around.

[RE]

SEEKINGALPHA.COM 2026-05-30

The Great Debt Debacle Has Arrived

The United States has now crossed a line that no developed economy in world history has ever crossed and survived intact. In just the past decade, our national debt has doubled. Not grown modestly. Not increased in line with GDP. Doubled.

And that is merely the headline federal debt number. When you add in private debt - corporate, household, municipal, bank - the United States now sits atop over $100 trillion in total outstanding obligations. In fact, total business debt alone has skyrocketed to $22 trillion, or 70% of GDP - the same percentage that ushered in the Global Financial Crisis in 2008. That alone should terrify any rational investor. Oh, and then there's the unfunded liabilities, which add another $80 trillion to the dung pile.

No worries.  Raise the Debt Ceiling to $INFINITY$ !  Or Infinity to the power of Infinity!  No wait...Mint a $200T Platinum Coin and pay the whole thing off with that!  Can we apply for that new Bioluminescent VISA Card?

I really have to wonder WTF buys the Toilet Paper at the Treasury Auctions these days and where they get the money to buy the bonds?  Do they sell Nvidia stock?  Do they pay for it with BTC?  Maybe they borrow it from Luxemborg? 

Clearly, The Smartest Guys in the Room now are equipped with the best AI Super Cooled Super Conducting Paralle Processing Super Computers and understand this far better than the rest of us mere mortals, so just Pahhty On!

RE

[TDoS]

Americans are patriotic and will happily experience homelessness and deprivation before they see any issues with the system.

Really? You aren't homeless, don't suffer deprivation, and see all SORTS of issues with the system. What makes you think most folks are any different? Because some MSM mouthpiece said otherwise?

[K-Dog]

Americans are patriotic and will happily experience homelessness and deprivation before they see any issues with the system.

Really? You aren't homeless, don't suffer deprivation, and see all SORTS of issues with the system. What makes you think most folks are any different? Because some MSM mouthpiece said otherwise?

I have always seen problems with the system.  It is in my nature.  I am also painfully aware of how ill informed most people are, and that I am most definitely an exception the general rule.  Making me an idiot or a savant, depending on your point of view.

Most people concern themselves with the banalities of their lives and nothing else.  Not many people care to crunch the big numbers.

Concerning my original statement.  I stand by it.