Global Impending Economic Doom Thread.

Ooooo charts....

 

Stay on topic.

 

I have. A chart without context is as useless as a spurious relationship.

 

This chart is obscene. "MAGA" is making this situation worse.

 

This mindless gibberish is the best you can manage ?

 

You forgot an argument. That Marxists have the most comprehensive amalysis into crisis theory, is a matter of fact. Others, like the post-Keynesians are playing catchup!

 

Don't see WW3 in the cards. If we had not have invented nukes WW3 would be looming but - nukes changed the equation.

For all of history if your economy was faltering you could go steal your neighbors stuff. The advent of nukes has changed this. The Return on Investment is way to negative.

 

I didn't forget anything of the sort. All I did was comment on your baseless accusation. Marxists are not the only group that makes or has made economic prognostications and this is why your post was fallacious nonsense.

 

The US 10 yr Bond yield has rocketed up over the last few weeks along with other short term bonds. Cheap money no more.

The markets are starting to react to these increasing rates - at least according to the pundits.

Get ready for a huge increase to the interest on our debt over the next few years which will eat into growth.

 

Eat growth and virtually make all debt unpayable. Next stop, economic default.

 

2-year Treasury yield rises to highest in a decade as bond market continues to hit records

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https://www.cnbc.com/2018/10/10/us-bonds-and-fixed-income-key-economic-data-eyed.html

The "GLUT" of debt issuance. The Bond market is drowning in US debt.

 

I heard somewhere that if interest rates jump up to the 5.5% median it's game over for the United States.

 

If average interest rates on our debt hit 5.5% - say in 5 years when the debt will be 26 Trillion or more - Interest payments on our debt would exceed 1.4 Trillion dollars per year.

On Revenue of 4 Trillion ( we are at 3.6 right now so being optimistic in relation to revenue and assuming no economic downturn) this is 35% - ratio of interest to income.

Red lights go off at the IMF when a nations interest hits 30% of income - water is coming into the ship faster than it can be bailed out.

At 35% the ship is pretty much done for.

 

Many are saying that process will begin in short order at the end of 2019 taking up speed between 2020-25.

 

The process has already begun. In 2014 we could float 2 year debt at less than 0.5% Now we have to pay over 2.8%. This is a difference of 2.3%.

If the average interest on our debt increased by 2.3% - from where we are at now (2.25%) - this would be 4.55%.

Remember that 30 year debt - having a yield of 7%, and higher, that came due over the last 10 years was refinanced at much lower rates and at shorter terms in order to get the ave interest this low (such as the 2yr, 5yr and 10 yr) This low yield debt (sometimes at 0.5% and lower) went a long way in reducing the overall average debt.

The problem is that this short term debt has to be refinanced ... at shorter terms 2yr in 2 years .. 5 year in 5 years and so on.

Now we are refinancing debt that had a yield of 0.4% at much higher rates - 2.8% for the 2 year , 3.2% for the 10 year.

This of course has the reverse effect on the overall average interest rate. The other problem is there is huge upward pressure on debt interest rates so they could go much higher in a very short period of time.