Sunday, June 26, 2011
Helpfully, CBO juxtaposed these two alternative futures in a pair of graphs and, just as last time, it projects that deficits will disappear entirely by the end of President Obama's second term (if he gets a second term) if Congress were to just sit on its hands and do nothing.
Take a look."
Someone naïve in the ways of US corporations might say that these rules are paper-thin, because shareholders can just elect new directors if the incumbents are recalcitrant. As long as they can elect the directors, one might think, shareholders rule the firm. That would be plausible if American corporate ownership were concentrated and powerful, with major shareholders owning, say, 25% of a company’s stock – a structure common in most other advanced countries, where families, foundations, or financial institutions more often have that kind of authority inside large firms.
But that is neither how US firms are owned, nor how US corporate elections work. Ownership in large American firms is diffuse, with block-holding shareholders scarce, even today. Hedge funds with big blocks of stock are news, not the norm."
It's a class system, with the corporate elite on top. In a generation or so, they'll start awarding themselves titles.
Friday, June 24, 2011
Money is as money does. Money is as money was. Factories idle, millions unemployed, a mountain of bad debt on their backs, how to prime the pump? Haven’t we been here before? How to produce to capacity when the Fed chief is confused between keeping the banks open (letting money circulate) and bailing out his Wall Street handlers (keeping bad debts on the books and fatally constipating the monetary economy).
With apologies in advance to all MMT’ers who may be offended, here’s what I take away from the MMT story, which is usually preceded with claims that it is the most amazing discovery in the history of humankind:
The Congress decides to set up their own printing presses (accounts at the Treasury backed by nothing, just like the rest of our money) and start spending money on the things that America needs: supporting women and children in poverty; a massive infrastructure jobs program; basic research; early childhood and primary and secondary education; and so on.
The new money looks and feels just like the old money. No currency even needs to be created; the old play money still works. People get contracts to do work for the government and money shows up in their bank accounts.
Because the economy is in a deadly liquidity trap that the Fed chairman fails to understand will not be cured by zero interest rates, with a gigantic overhang of bad debt on the books of the banks that they are sending the American people into poverty to collect (after they’ve taken their homes), and because the labor market has been beaten down by Republican-inspired ideologues in Congress to the point where the labor share of national income is at its lowest level in a century, and because the Supreme Court has consistently ruled for corporations’ rights over worker rights, even giving the corporations carte blanche to buy politicians, and because Americans have let themselves become fat and stupid as their government has lulled them into a cowed stupor with terrifying pat-downs at airports, and Nazi-style police behavior (or whoever those people are), and with an unending televised onslaught of misinformation about taxes, the economy, terrorists threats, and all the other reasons they have to be afraid—for all these reasons working Americans have given up fighting and are cowering in their homes and apartments hoping they are not the next to be sent into hell, to live in their cars as long as they still own them, and then onto the streets, where they can see all around them in increasing numbers the end game of the American Dream (i.e., the capitalists—the corporate elites—won , and labor lost).
For all these reasons, inflation is not really a problem. (And let’s be clear, Ron Paul, inflation is a general increase in the price level, not of the money supply alone).
So Congress continues to print money merrily, and ordinary Americans can feel the blood returning to their cheeks and money to their checking accounts as the miraculous circular flow of income and product expands, that which is necessary for an economy to be healthy, and which is terminally infarcted when most of the money ends up in the hands of a very few people. (The Fed objects that the money Congress is printing isn't backed by anything at the Fed, but Congress tells the Fed to shut up.)
When, years down the road and ten percentage points closer to potential output, a little bit of inflation does occur, the Congress orders the Fed to increase reserve requirements. We don’t want so much of that credit money, Congress says, and Jamie Dimon whines that he can’t make a decent living anymore and moves to Russia. Congress allows a mild inflation, however, which over the span of a number of years whittles away much of the real value of the debt.
The Congress also realigns the overall budget with sane national priorities (what a concept), reducing military adventures abroad and setting up a single-payer national health care plan, as American doctors, now mostly salaried but still doing well, have requested. The health insurance companies whine that it is now too hard to make a decent living anymore and all open offices in developing countries. And taxes are adjusted so that those who are taking the most out of the American economy are also expected to be those putting the most back in, proportionally speaking.
A general awareness of the social welfare benefits of a more equal distribution of income and wealth inspires other policies that make everyone except the greediest persons feel much, much better about living in America.
It takes some practice but Congress learns that with reserve requirements approaching a hundred percent—with the big leverage gone from the banking system—that Wall Street- and bank-induced credit bubbles are much rarer and that control of the money supply is much easier. Banks, of course, were prohibited from investment banking by the reinstitution of Glass-Steagall early in the reform period. Capital ratios on investment banks were raised to twenty percent and any investment bank that goes bust in the new regime, goes bust. No bailouts. Banks are limited in size to two percent of GDP in assets. Financial research proved long ago that big banks offered no economies of scale or scope.
After so many years, no one remembers that there had been a change in the money they are using. It still looks and feels the same. It is true that large numbers of one hundred dollar bills still go unaccounted-for, but that is considered a small price to pay compared to the massive wealth transfer from working Americans to the rich that occurred in 2008 and following years. A Congressional office is established with a mandate to keep reserve requirements above ninety percent, and the Fed is disbanded. The Church of Scientology makes an offer for their Washington, D.C., temple, but it is declined. It becomes a museum dedicated to financial follies over the centuries.
With the aggressive use of the power of Congress to take over the control of the money supply, the value of the American dollar decreased on the international markets faster than that of the currencies of nations that hold to the fictions of fractional reserve banking, credit money, bailouts, the IMF, the World Bank, and other foolishness. The debasement of the currency, a failed goal of the prior Fed chair, is hailed by labor and industry alike as Chinese, Japanese and Indian companies rush to build factories and research centers in America. Since the dollar has fallen, and oil is now being priced in a basket of currencies most of which are as weak as the dollar, oil prices rise—but they rise for everyone, as global growth and peak oil collide. This factor as well makes it very advantageous for foreign companies to manufacture in America, which is still the second- or third-biggest market in the world. The dollar even depreciates against the loonie and the peso, killing any chance of a North American monetary union (the example of the EU had pretty much killed enthusiasm for that idea anyway).
And America rises phoenix-like from the ashes of debt deflation, deleveraging, and depression.
(All right, MMT’ers, you’ve got to comment on this….) [corrected 6/25]
Thursday, June 23, 2011
In a 13 month period from May 2003 to June 2004, the Federal Reserve sent nearly $12 billion in cash, mainly in $100 bills from the United States to Iraq. To do that, the Federal Reserve Bank in New York had to pack 281 million individual bills ... onto wooden pallets to be shipped to Iraq. The cash weighed more than 363 tons and was loaded onto C-130 cargo planes to be flown into Baghdad...
The Los Angeles Times reported at the time:
Prior audits by Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, found that more than $8.8 billion in such funds could not be properly accounted for."
George is really ripping the Fed today. See second story below.
A high stink of corruption emanates from Washington and New York.
Brutally honest, Bernanke admitted that he had no clue what was actually causing the current fragility in the U.S. economic recovery. While the FOMC statement assigned blame outside of the U.S., pointing at Japan along with rising food and oil prices, Bernanke was put on the spot by a reporter who noted the inconsistency behind that explanation and a lowering of long term forecasts. Bernanke took the hit, admitting only some of the factors were temporary and that he didn’t know exactly what was causing the slowdown, but that it would persist. “Growth,” said Bernanke, “will return into 2012.”
Specifically, Bernanke said today:
We don't have a precise read on why this slower pace of growth is persisting.
Well, it is obvious to anyone who has been paying attention what's causing the slow down, and if Mr. Bernanke doesn't know, he should be fired."
George is ripping the Fed today. The post goes on to quote numerous warnings from the BIS and others to the Fed before the crisis that things were getting out of hand--warnings the Fed chose to ignore. Why? Because its Wall Street controllers were making gobs of money from the risky and often fraudulent practices it was condoning.
Wednesday, June 22, 2011
The real job losses are greater than the estimate of 7.5 million. They are closer to 10.5 million, as 3 million people have stopped looking for work. Equally troublesome is the lower labor participation rate; some 5 million jobs have vanished from manufacturing, long America's greatest strength. Just think: Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of the year 2000, even though our population has grown by nearly 30 million.
The most recent statistics are unsettling and dismaying, despite the increase of 54,000 jobs in the May numbers. Nonagricultural full-time employment actually fell by 142,000, on top of the 291,000 decline the preceding month."
Judging by their comments, a great many readers were incredulous. For years, Republicans have told them over and over again that taxes in the United States are exceptionally high and the primary obstacle to growth, and that a huge tax cut would do more to raise growth than any other policy."
Read. The author is a Republican, by the way.
Tuesday, June 21, 2011
Good Old Golden Rule Days
The past several decades have witnessed an erosion of our manufacturing base in exchange for a reliance on wealth creation via financial assets.
Fiscal balance alone will not likely produce 20 million jobs over the next decade. Government must take a leading role in job creation.
A growing number of skeptics wonder whether college is worth the time or the cost."
Click through and read the whole article--sounds like FDR's 1933 inaugural: what we need is more government involvement in the economy, not less; a plan of action to put people to work.
Monday, June 20, 2011
But the heart of Nocera’s column discusses how unique the Glass Steagall act was, changing the banking environment form one of speculation (and massive depositor losses) to a boring, modestly profitable, cornerstone of the national economy."
Click through and read Barry's article, then click through to the Nocera piece. Obomba has indeed turned out to be the Manchurian Candidate.
Sunday, June 19, 2011
Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks."
The Automatic Earth is an eclectic site that features intuitive analysis in a style similar to my own (minus the obsession with “animal spirits”). This video is from their site and recommends steps that mirror my own preparations (including asset allocation) pretty closely. I haven’t sold my house and bought a farm, and I don’t think that’s a feasible move for most people. If you’ve got a job, keep it, and maybe start a garden, would be my counsel. But the monetary chaos that is likely to be upon us fairly soon is unimaginable. So dollar cash reserves are probably as safe as one can get, maybe better in a Treasury money fund than in a bank, although I can only hope that the Feds have learned the lesson they botched in 2008, namely, that it would have been a whole lot better to guarantee all deposits and let anyone take their money out who wanted to, while nationalizing the banks, so that no one worried that their bank would fail. And then they should have let the banks charge off their bad debts, which would have meant a lot of them would have failed. And heads should have rolled like they did when FDR threw out the moneychangers, and that Obomba was too much of a chickenshit Establishment puppet to do.
I’m reprinting FDR’s 1933 inaugural address below. I’ve been meaning to do this for a while. As a challenge to the reader—as we may lurch Hard Right in the next presidential election—I challenge readers to write the inaugural address the nation may hear in 2013—or the one they’d like to hear.
Franklin D. Roosevelt
First Inaugural AddressSaturday, March 4, 1933
The former Governor of New York rode to the Capitol with President Hoover. Pressures of the economy faced the President-elect as he took his oath of office from Chief Justice Charles Evans Hughes on the East Portico of the Capitol. He addressed the nation by radio and announced his plans for a New Deal. Throughout that day the President met with his Cabinet designees at the White House.
I AM certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.
In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.
Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.
Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.
Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.
Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency.
There are the lines of attack. I shall presently urge upon a new Congress in special session detailed measures for their fulfillment, and I shall seek the immediate assistance of the several States.
Through this program of action we address ourselves to putting our own national house in order and making income balance outgo. Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.
The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first consideration, upon the interdependence of the various elements in all parts of the United States—a recognition of the old and permanently important manifestation of the American spirit of the pioneer. It is the way to recovery. It is the immediate way. It is the strongest assurance that the recovery will endure.
In the field of world policy I would dedicate this Nation to the policy of the good neighbor—the neighbor who resolutely respects himself and, because he does so, respects the rights of others—the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.
If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we can not merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.
With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.
Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.
It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.
I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.
But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.
For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less.
We face the arduous days that lie before us in the warm courage of the national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.
We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.
In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come.
Eisenhower's worst fears came true. We invent enemies to buy the bombs | Simon Jenkins | Comment is free | The Guardian
Last week we got a glimpse of an answer and it was not nice. The outgoing US defence secretary, Robert Gates, berated Europe's 'failure of political will' in not maintaining defence spending. He said Nato had declined into a 'two-tier alliance' between those willing to wage war and those 'who specialise in 'soft' humanitarian, development, peacekeeping and talking tasks'. Peace, he implied, is for wimps. Real men buy bombs, and drop them."
Saturday, June 18, 2011
Telling us to chill? Make love not war? Throw the bums out and get a government that actually works for someone other than rich capitalists?
Original URL: http://www.theregister.co.uk/2011/06/14/ice_age/
Earth may be headed into a mini Ice Age within a decade
Physicists say sunspot cycle is 'going into hibernation'
By Lewis Page
What may be the science story of the century is breaking this evening, as heavyweight US solar physicists announce that the Sun appears to be headed into a lengthy spell of low activity, which could mean that the Earth – far from facing a global warming problem – is actually headed into a mini Ice Age.
Ice skating on the Thames by 2025?
The announcement made on 14 June (18:00 UK time) comes from scientists at the US National Solar Observatory (NSO) and US Air Force Research Laboratory. Three different analyses of the Sun's recent behaviour all indicate that a period of unusually low solar activity may be about to begin.
The Sun normally follows an 11-year cycle of activity. The current cycle, Cycle 24, is now supposed to be ramping up towards maximum strength. Increased numbers of sunspots and other indications ought to be happening: but in fact results so far are most disappointing. Scientists at the NSO now suspect, based on data showing decades-long trends leading to this point, that Cycle 25 may not happen at all.
This could have major implications for the Earth's climate. According to a statement issued by the NSO, announcing the research:
An immediate question is whether this slowdown presages a second Maunder Minimum, a 70-year period with virtually no sunspots [which occurred] during 1645-1715.
As NASA notes :
Early records of sunspots indicate that the Sun went through a period of inactivity in the late 17th century. Very few sunspots were seen on the Sun from about 1645 to 1715. Although the observations were not as extensive as in later years, the Sun was in fact well observed during this time and this lack of sunspots is well documented. This period of solar inactivity also corresponds to a climatic period called the "Little Ice Age" when rivers that are normally ice-free froze and snow fields remained year-round at lower altitudes. There is evidence that the Sun has had similar periods of inactivity in the more distant past.
During the Maunder Minimum and for periods either side of it, many European rivers which are ice-free today – including the Thames – routinely froze over, allowing ice skating and even for armies to march across them in some cases.
"This is highly unusual and unexpected," says Dr Frank Hill of the NSO. "But the fact that three completely different views of the Sun point in the same direction is a powerful indicator that the sunspot cycle may be going into hibernation."
Wednesday, June 15, 2011
This is research, not investment advice. You trade at your own risk.
Source: Robert Shiller’s home page
Note also the current ratio of corporate profits to GDP:
Shrinking profits (forecast) imply shrinking market capitalization. Corporations would have to buy back an inordinate amount of stock to maintain prices, methinks.
Wednesday, June 8, 2011
And we are are not as healthy as the citizens of the countries paying much less for their health care.
Tuesday, June 7, 2011
Some readers took issue with my failure to include state and local taxes in the calculation. I have now done that, using data from the Organization for Economic Cooperation and Development, which represents the major developed countries. Among its most important responsibilities is the collection of internationally comparable data on a wide variety of topics, including taxes and health care spending.
The table below shows total taxes, including state and local government taxes, as a share of G.D.P. in 2008, the latest year for which there is complete data. The table makes clear that the United States has very low taxes by international standards."
'The inability to differentiate between Wall Street and Main Street by Washington, as well as by the public at large, has hurt the image of Main Street banks and increased their cost of operations. One has to question whether we haven't created the makings of the next financial crisis or, indeed, disrupted the balance in our society between rich and poor.'"
The quote is from a bank president.
The experience of both Rome and Britain suggests that it is hard to stop the rot once it has set in, so here are the a few of the warning signs of trouble ahead: military overstretch, a widening gulf between rich and poor, a hollowed-out economy, citizens using debt to live beyond their means, and once-effective policies no longer working. The high levels of violent crime, epidemic of obesity, addiction to pornography and excessive use of energy may be telling us something: the US is in an advanced state of cultural decadence."
Sunday, June 5, 2011
If the unemployment rate drops below its adaptation level, consumer sentiment should improve markedly.
The yield curve certainly is not signaling recession:
And my “animal spirits” metric, A = –(U – UMEAN)/Sigma(U), correspondingly seems poised to go positive.
However note the divergence of the survey measure and the adaptation-level-theoretic measure.
It can be said that the main reason the unemployment rate went up last month was that there were a quarter of a million entrants into the labor force. Hence, the more optimistic those on the sidelines become and the higher the civilian participation rate, the more likely it is that the unemployment rate—which is still the headline rate—will go up. The labor market is at generational lows in terms of overall employment and the ability of unemployed persons to get a job.
Look for massive stimulus measures, overt or covert, as America ramps up for the presidential election. I continue to expect any exhilaration to be short-lived, as it was in the early ‘Seventies, and for unemployment to make new highs this decade. Any pronounced move toward fiscal austerity will likely cause a deflationary collapse rather quickly. Hence, I believe Obomba or Romney or whoever is the next puppet of the military-industrial-financial complex will take America into a wider, inflation-inducing war than the three we are already in. There may a big deflationary hiccup that precipitates the final escalation. A currency-depreciating inflation is the wet dream of all mainstream economists, and many in business, and to a certain extent, it makes sense: if the dollar tanks and oil becomes more expensive, American labor becomes cheap and America becomes a good place to invest and manufacture.
Unfortunately, a world war would probably strengthen the dollar.
And who knows what derivative liabilities would be triggered in a deflationary collapse? Bernanke confused keeping the banks open with bailing them out. He did not permit their bad loans to charge off. Until the bad debts in the world banking system are charged off, there will be no healthy growth. This is the lesson of Reinhart and Rogoff (see references on left). The Bretton Woods II supernova has flashed, and now we are waiting for gravitational collapse. It will come. Note how quickly debt-to-GDP declined during the Depression.