We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
We have been warned that the world is in for a long period of deleveraging from debt-driven economies. This via Zero Hedge:
This is not a bump in the road; it is the exhaustion of the entire model of growth that we have depended on for the past 30 years. Once the debt saturation point has been reached, adding more debt subtracts from the economy rather than adds to it. This is reflected in the decline of employment by every metric: total number of jobs, civilian participation, payrolls per capita, and employment as a percentage of the total population.
We are past the point of debt saturation, and so we need a new model of employment, and indeed of “growth” itself. Sadly, as discussed in a recent report, the Status Quo financial witch-doctors have only prescribed more debt and more unproductive friction.
Leverage means side effects more damaging than the primary damage, each debt throwing off enough neutrons to knock off several other debts.
Money however is not debt. Money is a ticket in line to say what the economy does next, presumably something for you.
The Fed, in normal times, creates and destroys tickets to that their number matches what the economy is capable of doing at once. They are not creating or destroying wealth when they do this, just supplying an exact need.
Debt is when the government soaks up your ticket so that you won't spend it and it can use it itself, supplying you with a bond as an unspendable place-holder.
If you want to spend something, you have to sell your bond to somebody else for the ticket you need.
The author of the Zero Hedge article should learn how to construct graphs so they are not misleading. He makes a big deal of the decline shown in graphs #4 and #5, claiming the downturn in the latter is more precipitous than in the former, when they are in fact the same and consistent with one another: a decline of around 3% in (work) participation in figure #5 is equivalent to a loss of around 5 million jobs, which is the size of the falloff plotted in figure #4. Same same.