I really think we are digging ourselves out of the depression!! Signs of life!!

Yeah, not so much. Actually, we have reached the event horizon, where every dollar we borrow creates ZERO economic activity.

What we are witnessing in markets is a precursor to collapse. Go ahead and argue with me, call me a "doomer", just provide credible evidence to the contrary. Taking all comers.

It ain't no precursor. It's the collapse itself.

Interesting graph, thanks - do you have an explanation of how it's created?

debt borrowed vs. GDP gains. For Example, in the 60's when we started borrowing in earnest, a dollar of debt contributed around three dollars in GDP. Today, every dollar borrowed yields a net loss of 60 cents.

This is another reason why I keep saying Government is losing the ability to fund it's daily operations, as there is no monetary policy one could enact to counter act this. Defecits do nothing to economies at this stage of collapse.

Accounting for population, we are already rolled back to early 80's employment levels, yet average wage has flattened, and if you figure inflation, dropped. And severity of just about every metric is picking up speed.

... if people call me a "doomer". I called this thing (ok, I didn't think it would be THIS bad) back in 2006 and got called all kinds of things here.

Those folks were wrong, and I was right.

I'm still right.

The MSM and the govt are doing their job. Their job is to convince as many people as possible that things are turning around. If they didn't we'd already be in much worse shape. But all they can do is delay, the time that this could have been actually prevented has passed.

Things are not getting better. The numbers are sliced and diced and bent and revised and spun, but a careful reading of them reveals the truth. No new hiring.

I don't tell folks this to make them feel bad, I tell them because there is still SOME time for preparation.

What do we do?

Like you, I called this a long time ago. I'm no brainiac, but I had an epiphany in 2005 when we were buying a house. We live in
a nice suburb. We drove around with our realtor--gazing at "Get into this house for $900 a month!" signs in front of McMansions.
We watched our realtor show us houses above our price range and urge us to spend more due to the "amazing financing out there
right now!" Our realtor and the mortgage broker insisted that we do an interest-only loan or a 3-2-1 buydown. We resisted and
were treated like financial fools for getting a conventional, fixed-rate mortgage. Our mortgage broker didn't even know how to
do a conventional mortgage. She couldn't find that paperwork. She was accustomed to talking people into the "creative financing".

After signing the papers (we bought a modest home), we walked to the car, sat inside for 20 minutes and neither of us said a word.
We were both in shock. I said, "You realize that all of this is going to collapse don't you? Our economy is so screwed."

I knew the credit-card spending would soon end too. You could just feel that people were maxing out. I was very worried about
that, but after I saw what was happening in the mortgage world--I felt like I was in a horror movie.

We were always savers and we didn't have any credit cards--but we started cutting back on everything. We are trying, but not saving
as much as we want. We dealt with a 25 percent paycut for six months in 2009.

In your opinion, is it about saving money and having an emergency fund? Or do you have other suggestions?

Thanks for your post. I'm always interest in statistics. As you said, the MSM is practically the PR arm for a delusional, "Isn't
the economy just great!" campaign. I follow the the Baltic Exchange Dry Index http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

Here is my take

We have a major credit contraction, the bad debts are not cleared out of the system, the people who made the bad decisions are rewarded.

No real recovery to you clear the bad debt and remove the perpetrators of the high risk investment environment.

this is more like a wealthy alcoholic problem. Things don't get better or change until your living in a box. Or your dead.

I tell family and friends we are living in a Ponzi world, and it's gonna implode. Just like Bernie Madoff's victims believed in his financial Ponzi until it imploded, so too will the majority of people believe in the 'recovery' until the world Ponzi implodes.

Somewhat off topic..but if they want to cut the budget.. I think they need to freeze the pay in CONgress and take away their health care.

For a start looking at GDP returns for debt growth in a one year horizon is asinine so the last datum is out. For another, what is the correlation between this metric and "collapse"? How was this established? What's the coefficient? Why did we not collapse when this chart went negative before? Does this cover the last three quarters of GDP growth? Why not?

things move at log scale in both booms, and busts.

The only revision is a revision down, or worse, unless you think THTB are somehow skewing data to look worse than it is (allowing for an upward revision)???

Really?? Hey, if that is your position then I will back way off of you, because I am in the presence of one of the last optimists, and we need more of you!!

reflected on that graph? Is there perhaps another graph that shows the impact and future impact (hyperinflation) of their silly and overused idea for getting out of this mess?

At any point in time we have the ability to blow up another countries currency. The rest of the world has the same budget issues we have.

I respect you a lot, but rationalizing and comparing past events that don't allow for singularities is folly.

Nothing says that a deflationary apex can't shift on a dime to hyperinflation, or that mixes of hyper-inflation and hyper-deflation aren't possible.

In fact, the more complex our systems become, the input required and the net effect of change become incalculable, almost guaranteeing mixed results.

As long as we have two oceans separating us from Asia and Europe and Mexico and Canada have no ability to invade.

When the US doesn't have the worlds largest Navy, Airforce, and Army, and 3000 Nuclear Warheads pointed at everyone call me.

and I've said I'd rather people had the unadultered bad news so they can rationally address the issue. AS long as this administration or any administration seem intent on placating the docile masses, no action will be taken.

Is the most difficult to overcome, as people speculate on UE claims benefits and where they are reflected in the report.

It takes a while to get it into people's head, it is a fucking telephone poll. It is based on no data collection other than a statistical model and answers on the phone.

for your clear warning.

before you demand it of others.

What else do you need metric-wise??

I can't do your analysis for you, a horse to water and all that.

just to let you know I see through that crap they're throwing at you.

thumbs up

when i say evidence, i mean real analysis. Since your assertion is not mainstream(nor credible), the burden is on you to support it.

much money to spend and if they don't spend there can't be any growth.
For years ( decades actually) I have believed that this growth couldn't continue. In the fifties and sixties people had decent jobs that gave them some discretionary spending which fueled growth. Corporations were weak but things changed. There was a concerted attack on unionism and with that an attack on employee pay and benefits. Take that, coupled with the direct involvement with corporate profits, and they found that they could squeeze the worker and make more profits. In order for people to spend we saw the growth of the credit card industry. One way to convince people that they had money when they didn't and growth continued. In the meantime Wall Street coundn't get anymore profit growth out of manufacturing so they began moving the operations offshore where labor was even cheaper. The result was the loss of jobs which curtailed spending. At this time I thought that this was it. The economy was going to go bust. I was wrong because I underestimated what their next step was going to be to keep this bubble growing. What did Wall Street to do? They convinced people that they have lots of money to spend not by actually paying them more but by getting them to spend their equity that they had in assets.
That's it. Ballgame over. They still do not want equity in pay yet they want their cake and eat it to.
I don't see this economy getting any better until the wealth that's been accumulating at the top is returned to the middle class and that ain't happening any time soon.
They are milking dry tits.

What is included in "new total debt"? Is it public, private or both?

Thanks.

via taxes & lost services..the rich weasel out of their share via loopholes the rest of cannot use.

Too many people have too much debt they can never pay off, and too many people are earning too little to live on comfortably.

Once we are in the vortex, it's almost impossible to get out.. Public spends less, jobs are lost, more jobs lost, less incomes to buy other services/products, so more jobs end up lost, etc etc etc