Because extreme amounts of debt severely restrict the ability of an economy to grow its way out of a recession, or even worse, a depression – the interest on the debt has to be paid from somewhere.
Over at the Market Ticker, Karl Denninger does a great job mowing down the so-called “green shoots” (which we previously talked about in this article) of a nascent recovery in the United States. Just look at the following graphs.
The slight dip on the far right of the graph is being hailed as a ‘green shoot’.
This amount of dip is entirely within normal measurement error.
You would be correct if you inferred that consumer debt was being replaced with federal debt.
Heard about how many companies are “beating their earnings estimates”? Of course if you drop the high jump bar from 7 feet to 2 feet, pretty much everyone can clear it!
It’s really important to understand that all so-called “information” put out in the financial press and
government statistics is “spun”.
Fortunately, there are internet sites that do sift through and interpret the data in a more meaningful way –
and WE ARE GOING TO BRING YOU THEIR CONCLUSIONS!
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