The Marginal Productivity of Debt.

The key to understanding the problem is the marginal productivity of debt, a concept curiously missing from the vocabulary of mainstream economics. Keynesians take comfort in the fact that total debt as a percentage of total GDP is safely below 100 in the United States while it is 100 and perhaps even more in some other countries. However, the significant ratio to watch is additional debt to additional GDP, or the amount of GDP contributed by the creation of $1 in new debt. It is this ratio that determines the quality of debt. Indeed, the higher the ratio, the more successful entrepreneurs are in increasing productivity, which is the only valid justification for going into debt in the first place.

Empty nonsense talk from European policy makers.

It is time to end globalism, time to end European Union, time to abandon Euro currency and shut down the Brussels parasitic state once and for all. European people don’t need their stinking opinions on how to run their lives. The sooner this modern economic and political systems come down, the sooner we’ll all breathe easily. It applies to all countries around the world.

G7′s Sheeple Distraction in IQALUIT, Canada, while Central Bankers Meet Secretly in Australia.

We don’t know what the Central Bankers will be discussing during their secret two day meeting in Australia, but what we know is that you don’t hold a well publicized G7 economic ministers meeting at the same time for no reason. If the CBs need a distraction that means that something is very grave and serious is going on. Whether we are on the verge of a new panic and financial crisis or something else, but it cant be good. Perhaps the sovereign debt issues in Europe are on the verge of causing a big monetary implosion and stock markets collapse.

Does the world have the courage to deal with its debts?

Quite a sensible article from an MSM source, Telegraph of UK, that aptly discusses the real state of things on the Central Banks’ front of deflationary fighting and suggests several solutions out of this global economic crisis. I, however, do not agree with the proposed solution ouf of indebtedness problem that we the people should pay down the debts as the author puts it “very slowly, by sweat and toil”. This contradicts the very natural economic self-interest of the majority of hundreds of millions of people that were either duped into borrowing by financial wizards or had to do it as they saw no other way of being able to afford things as the wages stagnated for decades. No, I propose to default on all the debts, walk away and let the owners of this world financial system have it. I in essense call for a debt revolt, stick it to them and let them be crushed under their own debts.

The Power Of The FED And Deflation.

This article from GoldSeek makes good points and explains quite clearly why US is going to stay in deflation much longer than most people and so called “economists” think, and why the privately owned FED is unable to reinflate the debt bubble.

Deflationary consumer attitudes: Beds made of hay are latest hotel craze in Europe.

Ultimately deflation is rooted in consumer attitudes toward taking on more debt for speculative and consumption purposes. When the proverbial consumer finally reaches the point when he is no longer capable of taking on more debt, an anti-deflationary mind set becomes entrenched and no Central Bank in the world with all its stimulative programs can kick start spending and encourage businesses and individuals to take on more debt. It is not the levels of debt that are catastrophic and lead to its deflation, but it is the inability or unwillingness of debtors to take on more debt is what spells doom for the finance “industry” and the rest of so called economy, which in reality is just a consumption mirage based on fiat money that supports inordinate levels of debt. The point of catastrophe has been reached and we are now gleefully deflating. Deflation can take many forms, such as walking away from your negative equity house, cutting your credit card debt, not being able to get a loan from a bank, or from booking a room in a Hay Hotel. This is a sign of times and only confirms the deflationary trend that, hopefully, will take a very firm hold and straighten this world economy for good.

Japanese bonds and Swiss National Bank err on the side of deflation.

Unlike Government orchestrated propaganda campaign to proclaim imminent recovery, the Government bonds investors and Central Bankers know that deflation is no where near the end. Both Japanese Government bond prices and Swiss National Bank officials tells us – deflation is here and not going away.

Sane discussion of deflation from MSM … for a change.

There are winners and losers, just as there are from most economic developments. The important point is that the people who lose are more powerful than the people who gain. That might explain why we hear about the dangers of deflation, and not about its advantages. It still doesn’t make them right.

There is no threat from deflation. It may even be desirable if it encourages a balance between saving and consumption, and discourages governments and banks from taking on debt.

Deflation is here and now and everywhere.

If one were to listen to the policy makers and news media, one might think that deflation may still be averted and has not yet arrived. But if one reads the official economic statistics from around the world one will see that deflationary spiral has already arrived and is beginning its whirlwind motions in earnest.

In a snub to ECB’s denial of deflation European Prices Fall 0.6%.

The question is now when will the European Central Bank finally admit that there is deflation in Eurozone?