








// I find it interesting that private debt has been >100% GDP throughout the "Industrial Age" (save 1940-1960], Furthermore, that it has been above 150% since about 1985, and has been on an upward slope since then. Last time it was above 150% was roughly 1925- 1940 (from middle of stock booming roaring 20's to end of Great Depression]
Debt on its own isn't necessarily a bad thing - it can show that you expect your return on investment to exceed the cost of borrowing, for instance. So a government might borrow to invest in its country's future via education or temporarily subsidising some industry to help it grow until it's profitable on its own, or something. On the other hand, it might be wasted money or a sign that the government has no idea how to get its country actually earning enough to pay its own way
The ratio of government to private debt is also interesting, but I'm not an economist![]()
Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
- Dr John Zoidberg
Thats about the only time debt is worth something. If one is a store and ya want to carry some inventory - buy it on credit and trim the profits off the cost of other people's money.
The other thing - is that the infrastructure is so set up for credit cards for transactions - maybe using it that way but pay that shit off monthly (or twice a month!) Cash is still a good way to do this unless it is a large purchase and then one should think about that shit.
All this debt is really a symptom of a major screw up in how we are managing this economy.
We got this new "information" based or abstract product based economy and it keeps blowing up on us as we move more and more industry outside the US.
With the decline of manufacturing and research for new products/base science (AT&T selling their labs to Lucent etc.) money started flowing into these make believe companies that earned on clicks and eye balls. Sold dog food and god knows what else from foreign lands.
What did we end up with? Tech bubble. A bunch of closed companies, burned up capital, burned out techies, and mother load of foreign workers that now take jobs from americans in their own fucking country.
(I once was searching a contract with an American company who "single sourced" their technology work through Tata - it was infuriating to have to ask some foreign company to work in an american company in america as an american. I'm sorry, but there is something seriously fucked up there.)
OK. So "abstract" products like web sites are a little harder to make a buck off than once thought.
So now the next abstract "information" product - interest only loans, arms, fixed mortgages, HELOCs, lease options, etc. If we are not going to make anything then maybe we can make paper mache structures for earning money. We'll apply these to houses and cars and other big ticket items.
Once again, the "information" or "abstract product" economy takes a shitter as we start hearing the big three automakers asking for loans and more stuff is sent over seas and walmarts open up in what were once neighborhood parks, and people are kicked out of the homes and banks go out of business simply because the underlying means of the majority of and common people to earning an income is being destroyed.
So the next thing is gold and oil options and trades and speculations - usually south american gold and middle eastern oil but hey - we will once again create these financial "products" that are nothing but spreadsheet games called hedge funds and commodity trading schemes. The commodity bubble. Now oil is dropping and gold is fast behind it.
The abstract economy only goes so far and all we have been achieving is lower wage jobs, shaky financial security, and borrowing money out the ass to live like we have the actual financial foundation to live the lifestyle we think we have (but many are finding - don't.)
The rich are getting richer and the common people are getting poorer. We create these "products" out of thin air (some in the past might have called them shell games) on glowing screens - who's purpose seems to be taking people's past earnings (savings and inheritance ) or future earnings(fools who use credit.) Meanwhile in the present - earnings are stagnant or going lower.
(My opinion the next bubble with be "government work." That may be the final bubble.)





^^^ great overview, Deo. And the recent employment statistics seem to bear out your prediction about 'government work' being the next bubble. Unfortunately, there is essentially nothing about 'government work' that contributes positively to the economy in the long term.
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