>Denninger: There Is No Way Out Of This Box


(click to enlarge)

Denninger explains why the piper must be paid soon, how much, and what will happen if Congress and the President keep making things worse:

…… that does not involve serious pain.

Go ahead folks – tell me how we can simply ignore this [graph above].

How we can pretend that the outstanding debt does not have to come back down to reasonable levels?

That these levels are “reasonable” – and that these rates of growth are “reasonable.”

This is the “magic of compounding” writ large – and in a fashion that is going to inflict severe pain on our population – and the longer we wait to deal with it, the worse it will be.

Bernanke, who was at The Fed during Greenspan’s time there, should have used his “education” – his claimed knowledge of economics – to make a lot of noise about this and demand that interest rates NOT be lowered to further encourage more debt-based consumption.

He did exactly the opposite.

As this decade wore on he should have sounded the alarm on our debt binge in all sectors, especially in the financial and consumer sectors where the growth in indebtedness has been the highest.

He did exactly the opposite.

Since this crisis began, in fact, every single government official who has spoken on the matter has emphasized even more lending, that is, cranking the amount of debt outstanding even higher, and The Federal Government has made good on their intent by, in the last year, spending more than $1.7 trillion dollars they did not have – that is, they borrowed even more.

That “pumping” of credit is why the stock market has “recovered.”

BUT IT CANNOT AND WILL NOT STAY “recovered”, because the debt that is outstanding is unsustainable – interest costs are crushing innovation and we are now absolutely reliant on near-zero interest rates lest everything collapse.

How bad is it?

Read the rest to find out.

Then pass this article, along with today’s other post, to others you will need to help you survive in the aftermath of the now-inevitable Collapse.

Tempus fugit.

And we are running out of tempus.

3 responses to “>Denninger: There Is No Way Out Of This Box

  1. >It's posted on Alarm and Muster.

  2. >There is a way out.Start an empire.God help us The People if we choose that route, because us The State is effed.

  3. >Well we could always repudiate the debt…Who accumulated it? The enemy.Who do they want to pay for it? Us.Is that going to happen? Not really but they'll hold this fraud above the heads of everyone who will still obey and not head for the exits and underground.Up with the underground economy, barter, trade, grow-make your own items or provide vital services in exchange. Individuals can do that but groups will sooner or later need some sort of political entity to operate more efficiently.