Comments on: Dr. Woody Bock’s Essay: The Future Evolution of the Debt-to-GDP Ratio

By: Ned S

Ned S — Fri, 22 May 2009 04:55:52 +0000

Pete - The US might like a war. But the trick is to get someone else to fight it while they provide the bullets. And apart from Sitting Bull and Cochise they've definitely been away players since they got a good taste of what a home game was like back in the mid 1800s.

I doubt Europe is interested - They don't have any empires to pinch off each other anymore. Plus they tried it a couple of times anyway and decided they didn't like it.

I suppose Pakistan could get its IMF handout and decide to spend it nuking India and getting nuked back - Doesn't sound too likely though. Or India might decide it wants Pakistan back - Even less likely - Who'd want Pakistan?

Plus no money to be made from nuclear holocaust anyway - All over way too quick. No value in that. It has to be conventional war dragged out over a lot of years with lots of bullets sold and lots of property destroyed that needs to be rebuilt to be an effective stimulus package.

Who else might play?

Russia lining up against China might be handy - But it seems a bit fanciful - The CIA would have to do a lot of leg work in less than friendly territories to make that happen.

Isreal jumping on Iran is one of the more promising alternatives. With Russia backing Iran and the US backing Isreal? But I doubt Russia cares that much about Iran really - The Russians have got plenty of their own oil. And Americans cry a lot every time they get a flag draped aliminium box delivered airmail - Doubt they'd cut it psychologically against anyone who hits back.

Still, give the world 8 or 10 years of global recession and lots of angry young men and desperate old politicians and anything is possible I suppose? Cheers!Must admit, inflation sounds better though?

By: Biker Pete

Biker Pete — Fri, 22 May 2009 04:49:02 +0000

David: Yes, we sidestepped the crash too (at 6200, anyway); largely thanks to DR (rather than DRA) which I've read daily for years. The World Bank helped, too. We were yachting near Lakes Entrance when a radio report basically confirmed what Bill had been saying that week. I'd already signalled my intentions, but WB confirmation helped convince my partner (granddaughter of a legendary BC broker). We emailed instructions to WA to sell... and saved megabucks.

By: Unpopular Truth

Unpopular Truth — Fri, 22 May 2009 04:34:54 +0000

Lets not forget that those in power can change the rules when it suits them. It wont take much for the USA to decide to 'neutralize the debt' or freeze interest payments or something else if it really becomes a problem for them. That'll happen when those who are owed money start to get more aggressive, and it's politically viable.

By: David (Brisvegas)

David (Brisvegas) — Fri, 22 May 2009 00:31:21 +0000

Good to be here.
I managed to avoid the stock market crash- sold out in Feb 07.
More good luck than market insight, but glad I dodged some of the problems that would have come my way.

By: Biker Pete

Biker Pete — Thu, 21 May 2009 16:44:54 +0000

Ah, but I was reading it _long_ before Dan arrived in Australia, Pete. There's no shame in climbing aboard during the journey. As the lone Ratbiker on this ark, I welcome you aboard, David! Mind where you step

By: Pete

Pete — Thu, 21 May 2009 15:05:17 +0000

"rising government deficits as percentage of GDP actually neutralise the effects of stimulus spending on GDP. Put that in your pipe and smoke it IMF" Haha, good one Dan. Debt to GDP level "And what level is that? Dr. Bock's chart says it's around 10%" Rock-on. We're headed for more than that already. My guess is that we'll actually go well above 40%. Also consider that the GDP level will probably fall. That really messes things up. "Conversely, when prospects for the long run are grim, voters are easily swayed by demagogues to vote for the Hitler of their day" Completely agree with that. Now perhaps we shouldn't worry about an Australian Hitler too much, because we are international lightweights. But an American Hitler on the other hand (some would argue that Bush was part way there) would be a real mess for the world. And America is going down the gurgler in a hurry. It's also worth noting that the only thing that pulled America out of the Great Depression was WWII. I think they remember that lesson quite well.

By: Pete

Pete — Thu, 21 May 2009 14:56:02 +0000

David: Shame you only started reading this year. I've been reading for about 18 months and the articles and advice saved me from the stock market shenannigans big time.

Hang about and hear about how things will unfold...before they do.

By: Robert

Robert — Thu, 21 May 2009 12:09:50 +0000

Productivity will only grow with increased efficiency, and Lean Thinking is the best known improvemnt method. I am sure most investors dont realise that companies are operating at almost 50% waste in their costs. The acknowledged best operator is Toyota.
Look at their financials vs GM, that is productivity not goverment rubbbish about more people to grow the economy, it is the yield per capita that determines wealth per capita.
I would love you to provide a finance view of Lean and how it should be applied to industry.

By: Lachlan

Lachlan — Thu, 21 May 2009 06:41:34 +0000

USD 2Trillion wont be worth much soon anyhow and anyhow the whole problem will help justify doing what both sides really want to do anyhow which is to bring about a new world currency.

By: David

David — Thu, 21 May 2009 02:41:25 +0000

I've only caught on to your articles this year, and are fascinating reading.
If the US government got itself in a situation where it couldn't pay it's debts to overseas investors, and took a protectionist attitude and defaulted on borrowings to non-US creditors, who or what could do anything about it? WWW3. You'd want to be backing US to win that with it's armed forces and weaponry.
We read that China has the US by the proverbials with the amount of debt they have purchased.
In this scenario, who has who by the proverbials?
It's the Alan Bond motto, if you owe the bank $50K, you've got a problem, and if you owe them $500M, they've got the problem.
Love to hear your thoughts on this.

Regards