Via Tom Ferguson:
- Tópicos para todo o post: Banana republic, Credit markets, Doomsday scenarios, Macroeconomic policy, Politics, Taxes, The destruction of the middle class :
- Linus Huber says:
August 1, 2011 at 6:03 pm
Cuts are essential. Of course, they can go on and devalue the dollar further and further but the game is very dangerous. Suddenly the rate of interest will shoot up! Then you got a real mess (Italy, Greece).
- Yves Smith says:
August 1, 2011 at 7:34 pm
The US is not Italy or Greece. It controls its own currency.
Japan is the better comparable, it has had large deficits for over 20 years and has terribly demographics, oh, and only a single A bond rating, and yet it still has super low interest rates.
And don’t try saying it’s the high Japanese savings rate. It has plunged in the last few years, yet its bond yields have not budged
- Yves Smith says:
August 1, 2011 at 9:42 pm
Get a grip. The problem is private sector debt, not government debt. That is coming down as households delever. And the debt burden grew not as a result of Keynesianism but the effects of the global financial crisis (a dramatic fall in revenues).
If the private sector (businesses and households) are saving, the government needs to run a deficit. Otherwise the economy contacts and the debt burden gets WORSE as a percent of GDP. That has happened in every country that has tried this bogus approach (Ireland, Latvia, and Greece are current examples).
- MLB says:
August 1, 2011 at 1:20 pm
Obama worst president of all time relative to expectations?
- Hal (GT) says:
August 1, 2011 at 1:42 pm
It’s all smoke and mirrors. There is nothing of substance here to reduce USA’s risk of future default. Just the opposite really. The spot price of gold is a good tell for that that reality.
- F. Beard says:
August 1, 2011 at 2:10 pm
The great thing about deflation is that it helps those who need the most help – the rich. Nothing like sitting on a pile of cash and watching it grow in value risk-free.
- Crazy Horse says:
August 1, 2011 at 5:02 pm
No more cat food on the shelf? “Let Them Eat the Rich”
Não precisam de tradução, pois não? Há lá gente que já só pode comprar comida enlatada para animais...Cat food!