Denninger's latest theme is the spread between debt growth and GDP growth. If debt grows faster than GDP, it must later be balanced by GDP growing faster than debt. The last time GDP grew faster than debt? 1993. That's why OTB (Obama, Turbo Tim, Bernanke) need to defend the moribund banks and government corporations, but I repeat myself. Denninger lays it out:
THE ONLY WAY TO REPAIR THE FINANCIAL SYSTEM IS TO DRIVE THE PONZI INDICATOR POSITIVE AND HOLD IT THERE FOR A PERIOD OF MANY YEARS. THAT REQUIRES EITHER MASSIVE INCREASES IN GDP (IMPOSSIBLE GIVEN DEBT LOAD) OR MASSIVE DECREASES IN OUTSTANDING DEBT. SINCE WE CANNOT PAY DOWN THAT DEBT AS PROVED BY THE RAMPING DELINQUENCY AND DEFAULT RATES THE BAD DEBT THAT IS CURRENTLY BEING HIDDEN BY THE BANKS AND OTHER FINANCIAL INSTITUTIONS MUST BE FORCED INTO THE OPEN AND DEFAULTED.
Do you now recognize WHY Bernanke and the other so-called "economists" who have said (some of them under oath!) that "they never saw it coming", "subprime is contained", "housing prices represent fundamental strength in our economy" and other outrageous falsehoods?
Do you now understand why they're still spewing absolutely FALSE prognostications related to our economic outlook?
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