Excellent Snapshot Our Unfolding Fiscal Breaking Point

6 posts / 0 new
Last post
Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Excellent Snapshot Our Unfolding Fiscal Breaking Point

For those interested in the rapidity of our rapidly growing outflow versus inflow imbalance...offer graph and comments from Jesse's Cafe Americain...

http://jessescrossroadscafe.blogspot.com/2009/05/fiscal-meltdown-will-test-bond-and.html

Nichoman

 

Fiscal Meltdown Will Test the Bond and the Dollar to the Breaking Point

 

Don't blame the Democrats alone for this. Instead blame a political system that is corrupted by Wall Street and lobbyist money, and a mainstream media dominated by four corporations feeding a stream of managed news and perception spin to gullible US households.

The day of reckoning is nearly at hand, in which the currency crisis in the US will shake the financial foundations of the global economy.

"Outlays are rising at 17% YOY the fastest nominal pace since late 1981. With receipts falling 14.6% YOY their fastest drop in at least 40 years the gap between their growth rates is also the widest in the record.

All these rates are accelerating and are threatening to push the deficit to more than 50% of receipts and - at $1.1 trillion and rising - to more than 10% of private GDP."

Thanks to Sean Corrigan at Diapason Trading for this chart.

Mike Pilat's picture
Mike Pilat
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 929
Re: Excellent Snapshot Our Unfolding Fiscal Breaking Point

this seems to be a graphical definition of insolvency. great chart!

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Re: Excellent Snapshot Our Unfolding Fiscal Breaking Point

I am missing what the blue line represents.  Can someone help?

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: Excellent Snapshot Our Unfolding Fiscal Breaking Point

 hucklejohn, the blue line is the difference between receipts and outlays.

Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Re: Excellent Snapshot Our Unfolding Fiscal Breaking Point
hucklejohn wrote:

I am missing what the blue line represents.  Can someone help?

The blue line is the percent over/underfunded (right hand values on the chart with red percent underfunded...black numbers overfunded).

Two key things...

1.)  It's accelerating downward...or the rate of underfunding is getting worse with each month (rate of the rate).

2.)  Extrapolation indicates using past 6 months and projecting forward...we could be approaching an underfundment of over 70 percent of Federal Budget by end of this year.

Now...if use some of the data from "The Economics Of Inflation - A Study Of Currency Depreciation In Post War Germany" by Constantino Breshciani-Turroni.   One could make the comparison from charts in this book of underfundment at this increasing rate of acceleration...with European monetary policy from 1914-1923 and into the late 1920s (more than just the Weimar Republic Of Germany).  Could see accelerating inflation...hyperinflation within 12 months possibly within 6 months.  

This is just my very rough comparison/extrapolation...probably no surprise of 6-12 month timeline...but are all other variables the same (i.e. resource depletion, exchange rates, etc.) in these two cases.   Probably not.

 

Nichoman 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Excellent Snapshot Our Unfolding Fiscal Breaking Point

"Outlays are rising at 17% YOY the fastest nominal pace since late 1981. With receipts falling 14.6% YOY their fastest drop in at least 40 years the gap between their growth rates is also the widest in the record.

Yoi!  This looks bad.  The economy is being hit from both sides of the equation.

Larry

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments