Is there anyway to actually solve the debt situation around the world?
We kick off today with Chris Temple and a discussion focusing on the debt issues that are prevalent around the world. We debate if it is even possible to correct this without a major jubilee. Thanks to fractional reserve banking we might not have an option.
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What’s to solve?
Everything is fine with it…
Low or no borrowing costs
Rising asset prices
Low unemployment rates
No inflation
Why would you want to change that?
I would like to change that because I am aware of what will happen in the future. (I realize that you are being satirical!)
OWL is spot on , again.
..Dang Owl, I called for a debt Jubillee several months ago, maybe years ago!
Cut out the gov’t spending.
Go and owe no man
The bible is real clear on the issue
Amen, Jerry.
Watch Jerry, it will definitely eventually happen!
Thanks “In the Box” Just common sense.
We got into this mess because the whole education system over the last 30 years has been infiltrated and then dominated by socialists/Keynesian Democrats.
That theory does not work. Never will. Even Keynes, himself knew it.
There is only so much you bleed off an economy without destroying it.
History has shown that to be 10% to low teens% during boom times at most, for Long term stability.
Unfortunately the democratic process is won by politicians promising more goodies to the public. Politicians, who for the most part are ignorant of economics and unaware (or don’t care) about the damage they are doing by excess spending.
Could we get out of this mess without a Jubilee? Yes, but it may not be possible politically.
The way to get out of this is by cutting government spending and allowing inflation to reduce the debt in comparison to the GDP.
At this point in time stimulating “growth” cannot be the only way out of the problem.
I cannot see politicians accepting cutting spending.
Just look at what happened in the UK.
The program was immediately labeled austerity and vilified by the media and political opposition. As a result Cameron chose to retire rather than continue, even though I believe he was doing the right thing.
Government promises have been too high for too long.
Government has wasted money, in order for politicians to get re-elected.
We have borrowed from the future, and the future has now arrived and demands payment.
So you are OK with losing your pension? Because a
Debt Jubilee would probably wipe out all pension funds.
We may not have a choice, Professor.
It will not be pretty.
It probably will not happen bloodlessly.
The Government is preparing for a fight, and will not accept a revolution.
Blood will spill in the streets.
The only good thing is that it is theoretically possible to kick the can down the road for about another 5 years, if every alternative is tried.
I have been saying that for years. Perhaps not as dramatically as you, but I have said it.
Good question as it leads the discussing toward “What will happen if there is a Jubilee?” And how can be best prepare ourselves for such as event ?
I have pondered long and hard over what happens with a “Jubilee”.
Unfortunately there are too many variables to allow predictions…..except for generalities.
There are many ways in which a quasi-Jubilee may be voluntarily introduced, although I expect it to be forced, by inaction of politics until some default occurs.
It will not be nice to live through.
My best guess is that there will be decades of depression in the aftermath.
Casey may have the best solution, but that is not something I wish to choose.
Thanks, Bob.
Here’s’ a watch for you:
https://m.youtube.com/watch?v=-xu5p_nDcrg
To protect the internet
Thanks for the link.
I asked Cory to check out Pascua Lama when he was down there on his honeymoon.
Maybe he can shed some light on this…
This was an interesting segment guys. I got some good chuckles out of it.
The Central banks are doing a brilliant play. They re-regulated the banksters by strong liquidity requirements. They created new laws prohibiting derivative trading, commodity and currency manipulation. And this time there is no bailout for the banks.
There is two types of debt. 1) sovereign debt that is real. The CBs have protected that which includes pension funds. 2) There is phony debt which is a large portion of the money supply which will soon vaporize. Most derivatives and junk bonds are based on phony numbers and won’t exist when the collateral goes down in value. A prime example is oil. A bond issued using oil at 100 dollars per barrel by a company with a falsified stock price.
It’s a simple unwind of derivatives combined with another mechanism ( not going there ) which saves the economy, but washes out the phony fiat numbers.
The central banks know exactly what they are doing.
Chartster, you seriously think CALPERS, for example, is protected!
Dream on.
The Central Bankers know what they’re doing?
So how come, Posner, ex-president of the Philadelphia Fed, just a couple of days ago called the FOMC clueless?
CFS,
No disrespect, but your clueless.
I don’t understand your optimism, Chartster.
How do we deal with the 19 Trillion debt and far larger unfunded liabilities without all kinds of pain and broken promises?
GH,
Great question! Most of the debt is within our own country. Some debt is with other countries. We ( the US ) can unwind our own debt. Most debt we owe is from within. The off-set value is a wash.
True story that most don’t get.
I don’t understand your thinking at all.
You’ll have to explain much more clearly for me to think this is anything other than a disaster already baked into the cake.
That was my point. It’s a controlled implosion that will happen. It’s not doom and gloom. It’s just what’s going to happen, to get reality back to the financial system.
It’s certainly ” baked into the cake “.
Chartster…HUH???…:))
+1
The “banksters” OWN the CBs(!) and all debt is very real to the parties involved.
Derivatives can be treated as a charge off or bankruptcy. The sovereign debt can not. Sovereign debt is real debt. Derivatives ( will be treated as real debt ) is not real debt. It’s fiat or phony.
The controlled derivative implosion is nothing more than the unwinding of fiat. And coming soon.
Chartster, the currency is fiat not the bets that have been made (no matter how dumb some of them might be). The losses will be very real and will include parties that are not directly exposed.
For you to minimize the threat posed by the derivatives and debt by saying it is “nothing more than the unwinding of fiat” proves that you do not understand the situation at all.
I don’t know who you’ve been reading or listening to but I would stop it if I were you.
Hey, I tried to help a few..
There’s three types of people.
1. People that make things happen ( central banks )
2. People that adjust to what’s happening ( – 1% )
3. People that wonder WTF just happened ( 99 + % )
Not my fault you’re not a 2..
…Says the guy who’s blown every one of his calls for the last year and missed the huge run in the miners.
You’re too much, Chartster. 🙂
Spoken from a true novemberist. 😉
Say what you want but nothing will change the fact that you would have been better off buying all weakness since November, 2015 OR the one before.
It was the chance of your life but you remained certain that gold would crash to $500 “any day now.” I bet you still believe that it will.
If that’s not 99%er stuff, I don’t know what is.
The long term downtrend line hasent been broke yet. But, I doubt gold goes down to 500. It is possible that 1041 gets broke. Mid October should be a nice bounce, after that, we will have to see. A washout could” be in the cards that goes into the spring.
I was very surprised of the strength gold had earlier in the year. And did miss some good deals. I’m good with catching the next pullback, as gold hasn’t even gotten started,, yet.
Long term I’m as bullish as anyone out there.
Yep Matthew…agreed..didnt mean to be a smarty pants but that was way out there..:))
Good show today; great subject. I agree with Al, Chris in that there really isn’t any way to pay off the accumulated public debt. For years they have been rolling over the old and creating new debt because interest was falling……Now what? Negative rates will create a revolution. Pension funds are not going to survive in this environment. Danielle Park has a good understanding of the problem and some potential ideas along solutions. Al, do yourself a favor and listen to her podcast with Kerry Lutz. http://jugglingdynamite.com/ In fact, I’d like to suggest her as a guest someday on your program. I don’t remember you ever having a female on your show. She would be a good one to balance your commentators.
Al has interviewed Danielle Park in the past but him and Irish Tony have to careful of their tickers, LOL!
Danielle Park- Danielle Park- Danielle Park….Yes bring her back.
Has he not also interviewed the Resource Maven, Gwen Preston?
Rickards says Buy the Ruble. Bond rate war starting russia says 8% interest coming on russian bonds. The fed can’t beat that. Russia has 33000 Tons of Gold. 16% of their reserves are Gold, plus they are #2 in world as global producer, they are also #3 in gold (he said). So in a few weeks, watch Ruble soar, as oil and gold get a bid.
or maybe not.
Great story though.
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The latest Gary Savage:
http://etfdailynews.com/2016/09/28/oversold-gold-mining-index-presents-buying-opportunity/