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XMFSinchiruna (27.47)

America's Hoggish Slice of the Global Sovereign Debt Pie

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February 17, 2010 – Comments (15)

15 Comments – Post Your Own

#1) On February 17, 2010 at 8:51 AM, catoismymotor (40.16) wrote:

U-S-A! U-S-A! U-S-A!

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#2) On February 17, 2010 at 8:52 AM, galtline (33.15) wrote:

There is no mistake...it's ugly.  In all fairness though, I think it would be worthwhile to show a GDP by country comparison as well.  

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#3) On February 17, 2010 at 8:58 AM, XMFSinchiruna (27.47) wrote:

galtline

Why, so we can see just how much of our massaged GDP is sustained by the issuance of debt? Debt-to-GDP doesn't make this chart look much prettier.

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#4) On February 17, 2010 at 9:04 AM, catoismymotor (40.16) wrote:

I am having one of those "To heck with it! We're moving!" kind of days. This does nothing but make me more unhappy.

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#5) On February 17, 2010 at 10:24 AM, XMFSinchiruna (27.47) wrote:

catoismymotor

Sorry :(

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#6) On February 17, 2010 at 10:31 AM, GNUBEE (28.81) wrote:

If debt is what moves the global economy, why wouldn't you expect this graph? The bigger players will have a larger piece of the pie? Debt is not societies main concern. Remaining a society is the primary concern. Debt is just a way to have economies function, and a peoples society to occupationally exist. (a way to give people something to do)

Nothing unexpected here. .

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#7) On February 17, 2010 at 10:31 AM, catoismymotor (40.16) wrote:

Chris, it's not your fault. I never go after the messenger. Every once in a while my concerns launch a unified attack. When that happens I get in a funk and want to call it quits. This mood I'm in will pass.

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#8) On February 17, 2010 at 10:59 AM, d4winds (< 20) wrote:

You are completely irrelevant.  If you had any real concerns about US debt, you would have voiced them when GWB stuck us with the current fiscal mess and would have been sounding the housing bubble alarms from '03 onward.  Get a grip.

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#9) On February 17, 2010 at 11:03 AM, catoismymotor (40.16) wrote:

#8 - Your rudeness threatens your relevance. Attacking someone like that does not cast you inthe best light.

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#10) On February 17, 2010 at 11:24 AM, Turfscape (45.91) wrote:

To be fair, it would be more appropriate to compare the United States to the E.U. economy. Within those tightly bound European countries (particularly the ones using the same currency), there is little difference in the management of economy and debt from individual States in the U.S.

What does that chart look like if you list each state individually? What does it look like when you intertwine the Eurozone?

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#11) On February 17, 2010 at 12:56 PM, Dobbes (< 20) wrote:

That may be skewed by the fact that the US is refinanced ~1/3 of its debt in 2009.

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#12) On February 17, 2010 at 1:41 PM, XMFSinchiruna (27.47) wrote:

d4winds

You mean like when I converted the lion's share of my equity holdings to gold and silver equities in 2005 and began talking about the looming depression to anyone who would listen?  :P

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#13) On February 17, 2010 at 4:41 PM, USNHR (33.66) wrote:

#8) On February 17, 2010 at 10:59 AM, d4winds (< 20) wrote:

 If you had any real concerns about US debt, you would have voiced them when GWB stuck us with the current fiscal mess... __________________________________________

Obama has has the two highest deficits in American history, (and not by a small bit) and yet he isn't doing anything that I can tangibly see that requires that amount of spending. I"m sure that ACORN is making out like bandits though.

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#14) On February 17, 2010 at 6:40 PM, dbjella (< 20) wrote:

Chris -

Who do you think holds all this debt?  I know my parents don't :)

I remember when my grandpa told me about how the gov't would go around telling people to buy gov't bonds.  He said they were relentless during WWII.

Today, why don't we see the gov't asking us to buy gov't bonds anymore?  Have they found new buyers?

 

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#15) On February 17, 2010 at 9:38 PM, LiveOakGrey (< 20) wrote:

Sinch,

You mean like when I converted the lion's share of my equity holdings to gold and silver equities in 2005 and began talking about the looming depression to anyone who would listen? :P

Crazy goldbugs, out there digging holes in the backyard for bomb-shelters, stockpiling non-currency tradable baseball cards, and hoarding all the peanut butter off the grocery store shelves.  Save some for the Greeks! ;)

I just bought a bunch of PM stocks, and am very pleased to be in that market.

As far as the U.S. being 'hoggish' with debt, I look at it as not that we have a greater moral failing than the benevolent member states of the European Union, Japan, or humanistic and democratic China, but that we had an economy that emphasizes lower taxes and a greater consistency of the rule of law to protect property rights for the past 200 odd years.  

With those tendencies we had a much more entrepreneurial and innovative society and THAT attracted foreigners to BUY our debts.  Plus, they had less NEED for racking up debts like the US did, since our tax dollars were paying for so much of Western Europe's, later some of Eastern Europe's military defense against Russia, and Japan's, South Korea's, the Philippines and others, against China and North Korea's aggressions.  Much of our debt is due to expenses we took on to our economy for the primary benefit and immediate profit of our allies.  

It's reasonable, that at the time, it was a good deal for other nations to buy our debts, stockpile their savings in a safe offshore location over here, and earn interest, with the backing of our strong economy that ensured we wouldn't default for a long time in the future.

However, these countries weren't acting out of generosity.  They were only too happy to sell the narcotics of cheaply produced goods and cheaply available money for our bonds, to the world's worst addict - the U.S.  When they finally sold the US addict one bindle of smack too many for his over-taxed constitution to handle, he's overdosed and in the hospital on life support (though the economists are happy with his 'recovery').  

Now that we're on life-support, our erstwhile pushers are denouncing us for no longer being a good customer of their addictive products.  "Damn those Americans, they went and ruined our business, by overdosing on our product!"

They knew they were subsidizing an unsustainable and financially destructive game in the American bubble, but they enjoyed the profitability they got from it, just as much as so many of us did in buying their goods with money we didn't have.  They can equally share the blame for the size of the debt hang-over.  Our percentages of debt, don't show how much of it was taken on their behalf.

We actively sought out, and they actively pushed us to take disastrous debt loads.  It will be a long, bearish while, till our economies recover.  We are not more to blame than they.

 "The first one's free... and a little more won't hurt."

Pass the peanut butter,

-Grey 

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