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Message Subject THE ECONOMY & YOU # (Daily Updated Videos & Articles)
Poster Handle RoXY
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EU Banking Crisis: Towards the "Leveraged Breakup" of Euroland?
by Bob Chapman
December 17, 2011
International Forecaster

The Fed’s third quarter audit data shows a total system debt of 355% and of GDP, in spite of so-called de-leveraging. It is down from the second quarter’s 375% of GDP, but up from 264% a dozen years ago. Financial sector borrowing fell almost 50% in the quarter but non-financial debt increased while financial debt fell – a push so to speak. Unfortunately most of the debt growth emanated from Washington. That growth was $557 billion, of at a 14.1% annualized rate. Of course, what the federal government is doing is the antithesis of what they should be doing. Will these borrowings and debt continue, of course they will.

In 13 quarters Treasury debt is up $100 trillion an increase of almost $4.9 trillion, or by 92%. In three years Treasury debt rose from 16.2% of non-financial debt to 26.7% and total federal debt has increased from 46% of GDP to 78% of GDP. In 2007 federal non-financial debt grew from 3.3%. In 2010 it was 113%. Year-on-year total compensation rose only 2.8% as real inflation grew 11.6%. During that period corporate earnings set records. For the most part those earnings were achieved via layoffs. From the second thru the third quarters household debt fell 1.2% from a minus 0.6% and mortgage debt fell 1.8%, as consumer credit rose 1.2%.

Funding especially foreign funds of US bank branches has been wild and the Fed has done its best to obscure what they are up too. It looks like these foreign bank balances grew about $2.6 trillion.

The result is that pressure was relieved in Europe and the US went sideways in spite of massive increases in money and credit. Fed issuance is in a bubble and it is only a question of when it pops. It is not surprising that the American public believes we are headed in the wrong direction, some 70%. Only 39% approve of the administration’s financial policies. The GOP frontrunner Gingrich, if he ran against Obama today would lose 50% to 41%. It shows you how dumb Republicans are. Nominating a crook who is a guaranteed loser.

CONTINUE: [link to globalresearch.ca]
 
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