The four horsemen of the sluggish economy – Total credit market debt above $55 trillion, few jobs for many unemployed, the student debt bubble, and long-term compression of wages.
The US economy is facing tremendous financial hurdles in the years to come. The current market is being held together by a flood of debt that is masking underlying issues. Total credit market debt is many times larger than our annual GDP. Student loan debt continues to expand unabated even though the return-on-investment for many […]
The dynamic central banking duo – ECB balance sheet up over €3.1 trillion mimicking Fed balance that is close to $3 trillion. Shuffling toxic assets into darkness.
You might have the vague memory that the European Central Bank reacted somewhat negatively to the Federal Reserve’s massive balance sheet expansion a few years ago. The ECB was not following in the same path as that of the Fed. Well fast forward to the current Euro crisis and the ECB now has a balance […]
The contagion of the European Union and banking debt – 20 European Banks have liabilities above 50 percent of their home country GDP. Why an EU FDIC is highly unlikely in the short-term.
The crisis in Europe is boiling over yet again. The central connecting factor of all of this is too much debt relative to production. Debt in itself is not a bad thing. If you borrow modestly for a home and have sufficient income to cover your mortgage payment then this might actually be beneficial. When […]
The burden of unsupportable debt. US debt-to-GDP growing at a pace rivaling certain European nations – The dramatic problems of peak debt in 2012.
What makes this global financial crisis unique is that it is based on unsustainable levels of debt. In historical cases you would have sovereign nations defaulting on their debts but these were more isolated and clustered, not global issues. Today virtually every large crisis that is hitting is occurring because of peak debt situations. No […]