Debt And Not Much Deleveraging

[vt]

http://www.mckinsey.com/insights/eco...h_deleveraging

[gwynedd1]

Re: Debt And Not Much Deleveraging

http://www.mckinsey.com/insights/eco...h_deleveraging

It starts out with

"Insights"


and then proceeds with debt fact alphabets soup without making it coherent. No relationship to household debt to public debt and China is taken at par as if it were a market economy.


Money comes from credit or savings. Since the wealthy are net saving money and we are not in a depression then money must be coming from private credit or public debt. Is a puzzle suitable for ages 5 and up but its still a dangerous choking hazard for the average citizen so well trained in a false premise.

Yet if, as it appears, economies need ever-larger amounts of debt to grow, and deleveraging is rare and increasingly difficult, they may also need to learn to live more safely with high debt.

The faux Austrian economists in their fallout bunkers, and home economic window shoppers alike have failed to grasp what fiat currency really means. In a metal standard finances start out with net equity in the system . Money also continues to come out of the ground to add to net equity. Thus a town's net equity might be whatever gold and silver specie it had. 19th century Bad Ax, Michigan might have had 10,000 silver dollars flowing in it and another 1000 double eagles worth 20,000 with no debt anywhere. Now that same equity must be created by someone else's obligation. So in a word, duh, of course everything is running on much more debt since the aggregate economy has no net equity under a money system entirely created by obligations.