Insolvency

The New Crash Course

Long-time readers of this site know my respect for Chris Martenson and his Crash Course. Several years ago I recommended readers view his Crash Course, an interesting, simple presentation explaining why our current path is unsustainable.  I used this video as an integral part of a course I was then teaching on the 2007 collapse. Matters have not improved since then and Mr. Martenson [...]

Uncle Sam Is Long In The Tooth

The US has become mostly bluster. Uncle Sam is long in the tooth. Its misuse of the country’s treasure on bread and circuses has aged it prematurely. Simon Black likens the US to the aging Muhammed Ali when he took on the younger Larry Holmes. It wasn’t pretty then and what the US is going through won’t be pretty either. [...]

Economic Collapse — Glass Half-Full?

The following reaction came from a reader in response to Economic Disaster Coming Our Way. Monty, all these fact and figures certainly are frightening but there are some positives such as rapidly diminishing reliance on foreign energy supplies, a still reasonably educated and industrious work force (try setting up a sophisticated manufacturing plant in Mexico, Brazil, or even France and getting [...]

Economic Disaster Coming Our Way

I get tired of preaching economic disaster and I am sure readers are just as tired of reading about it. Yet, it is coming regardless. The disaster will be of such importance that one cannot overemphasize it or warn too often about it. It will be a disaster of unprecedented scale. My approach in discussing the on-coming economic disaster is [...]

QE Cannot Stop

Zerohedge.com showed this chart of US Treasury holdings through November 2013: Over the course of a year, the two major holders of Treasuries not named the Federal Reserve increased their holdings by about $200 Billion. China and Japan purchased about 20% of new US government debt. The Fed purchased 2.5 times what they did. The other entities shown on the [...]

Will Japan Topple First?

Simon Black discusses Japan’s problems: 46% of the Japanese government’s budget is financed by debt. Most of this is mopped up by the central bank. Yet as the government’s debt level already exceeds 200% of GDP, the gross interest payments alone eat up more than 50% of tax revenue.  Japan has no hope of getting out of this alive. Will [...]

Sundown In America

A very long and relevant talk was given by David Stockman at Harvard. His conclusion is that the problems are political and irreversible, two common themes of this website. Imagine how this bastion of liberalism must have taken his analysis? His talk follows (the emboldening in mine). SUNDOWN IN AMERICA: THE KEYNESIAN STATE-WRECK AHEAD Remarks of David A. Stockman at [...]

Not On My Watch

There is no way that stimulus can repair the economic problems. What we are looking at is a Fed policy that will never end, at least it will not willingly be ended by the Fed. The world and the US continue to deteriorate. What the Fed is doing now is throwing its version of a hail Mary pass. The game has been lost unless some unknown and unlikely miracle occurs. Economics does not believe in miracles although desperate economists sometimes do.

Detroit Was “Impossible”

Detroit has fallen. The implications of this event are more important than most realize. Many previously-thought sacred cows were crushed in Detroit’s fall: In the most union of states and cities, unions learned that they are not sacrosanct. Investors learned that there are no risk-free loans. Uncuttable services like police and public parks were cut even before the fiscal demise.  [...]

Smoke And Mirrors Running Out — Depression to Follow

Those who believe the economy is recovering are ignorant of the facts. Other than the Great Depression no US recovery (and I don’t believe we are in a recovery) taken longer. Eventually it may take more than a decade like the 1930s. Or perhaps it will be like Japan which is in its third decade of “recovery.” Politics and Economics [...]