Posts Tagged ‘Economy’

“Who did the most damage: Greenspan, Bernanke, or Yellen?…  When Mr. Greenspan took over at the Fed in August 1987, the government owed about $3 trillion… or about 40% of GDP.  Today, the national debt approaches $21 trillion – more than 100% of GDP.  Household and corporate debt levels have shown similar expansions. Overall, for the last 30 years, total (private and public) debt has grown about twice as fast as the economy that supports it….  And now, hundreds of millions of people depend on the EZ money economy created by Greenspan, Bernanke, and Yellen. Their jobs, their incomes, their investments, their retirements – all depend on keeping the fantasy alive.” -Bill Bonner

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  • Despite the long bull market, more Americans today have more debt than money in the bank than at any point since 1962, according to Deutsche Bank.
  • American household savings levels are at levels last seen in December 2007… right before the economy slipped into a recession that spurred the global financial crisis.
  • And total U.S. consumer debt – credit cards, auto loans, and student loans – just surged by the most in two years to $3.8 trillion.
  • And government debt is creeping toward a $1 trillion deficit per year. The national debt has topped $20 trillion.

 

If these folks can’t save or make their payments in a strong economy… how will they do it when interest rates go up and the next inevitable recession hits?

The answer is that they won’t.

-Steve Longenecker

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“Here’s a chart based on research from the Economic Policy Institute that describes the problem. As you can see, productivity in this country grew nearly 250% between 1948 and 2014, but median wages only grew 109%…You’ll also notice that the divergence begins around 1971… the year President Nixon removed the U.S. dollar from gold.

Why? Because paper money doesn’t transmit gains in productivity like real, sound money should.

In short, when the dollar was unlinked from gold, the government was granted the ability to create unlimited amounts of new money. But this money doesn’t flow to everyone equally. It is created in the banks, and then works its way through the financial system before eventually trickling down through the real economy. The result is that asset and consumer prices have risen far faster than wages.” -Justin Brill

Share Nicely?

Posted: March 4, 2017 in Economics
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“Nobody is sharing.  It’s not the sharing economy.  It’s the Access Economy.” -Chip Conley

“…the world has been binging on debt like never before.

The International Monetary Fund reported last month that total nonfinancial-sector debt has ballooned to an all-time record of $152 trillion… while the global debt-to-GDP ratio has also soared to an all-time high of 225%, up from 200% just 14 years ago.

Worse, we’re seeing record debt at the government level, the corporate level, and the consumer level (via auto and student loans, in particular). The boom in corporate borrowing is especially concerning…

U.S. companies have already borrowed $1.4 trillion this year to date, according to data firm Dealogic. This is on pace to shatter last year’s previous all-time record of $1.5 trillion.

Unfortunately, most are using this money to refinance existing loans… buy back stock and pay dividends… and finance expensive (and often questionable) mergers and acquisitions. This will do little to help the economy. But it greatly increases leverage… and risk.” -Justin Brill

Economic Lifeblood

Posted: September 27, 2016 in Economics
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“Exchange is the lifeblood, not only of our economy, but of civilization itself.” -Murray N. Rothbard

Banks are the growth engine of an economy. They make loans to fund new businesses, construction, and consumer spending. And they collect the ‘spread’ between what the short-term rates pay to borrow and the long-term rates they earn when they lend.” -Porter Stansberry