The Great Pig Roast

This is one category that we would prefer to not be in the Top 5 of.  When is the next pig roast?

P: Portugal
I: Ireland
G: Greece
S: Spain

Puru & The Rock

Puru Saxena presents his forecast:

"The developed nations are over-extended, their debt levels are ballooning and their governments are creating copious amounts of money. Put simply, most industrialised nations are now caught between a rock and a hard place. After years of excesses, the developed world is slowly beginning to realise that you cannot continue to live beyond your means and spend your way to prosperity. Today, US national debt stands just north of US$12 trillion, its fiscal deficit for this year alone should come in around US$1.6 trillion and the nation faces mind-boggling deficits for as far as the eye can see. Furthermore, demand for US government debt has begun to wane and this implies that the Federal Reserve will have to resort to creating even more money over the following years. Make no mistake; the US cannot afford higher interest-rates and in order to keep a lid on the government bond yields, we are convinced that the Federal Reserve will resort to debt monetisation. In other words, the central bank will create new dollars in order to fund the deficits. Needless to say, this money-creation will be extremely dilutive and end up undermining the viability of the world’s reserve currency. If our assessment is correct, within the course of this decade, the interest-payments on the existing government debt will become so large that the US Treasury will need to issue new debt just so that it can keep paying interest on its outstanding debt. When that happens, you be sure that foreigners will not be eager buyers of US government debt. Therefore, the Federal Reserve will have to create additional money, just to keep the Ponzi-scheme going. And when all else fails, the US will simply debase its currency, thereby repaying its creditors in significantly depreciated dollars. Although our prognosis may sound far-fetched, we want to remind you that throughout history, currency debasement has been the norm rather than the exception. Let us put it simply, the US is now left with three options:
•Sovereign default (unimaginable)
•Severe economic contraction (unlikely)
•Currency debasement (most probable)"

The entire article:
http://financialsense.com/editorials/saxena/2010/0407.html

Lets See How Far We've Come

Yeah well I believe it all is coming to an end
Oh well I guess we're gonna pretend
Let's see how far we've come
Let's see how far we've come
"How Far We've Come", Matchbox 20

This mania just can't keep going. Richard Heinberg in "Peak Everything", his follow up to best seller "The Party's Over", focuses on peaks in many categories: population, food production, climate stability and fresh water availability. We continue to be in "peak everything" mode. The psychology, the driving force behind it, still seems to be in denial. Our populace exhibits a strong sense of entitlement. "We deserve this!". Do we?? I guess that our enablers, the Chinese, still think so.

The outstanding public debt as of March 9, 2010 is 12, 559, 323,108,363.

I'm still dumbfounded by the linear thinkers that just can't grasp the fact that, yes, the party is over. We have to get back to normal historical levels for everything. As a country, we represent 4% of the world's population, yet we consume 25% of its resources. That "ain't" right. Not only is it wrong, it's unsustainable. A continued trend in this direction can only lead to major conflict. Our worldly neighbors just won't stand for it. Everyone wants and deserves a piece of the earth's "pie".

The chart below summarizes "how far we've come".

The Prolonged Bubble Aftermath

BOCA RATON, Fla., Jan 12 (Reuters) - "Renowned Yale University economist Robert Shiller said on Tuesday he sees U.S. housing prices falling further in coming months, fueling more fears about the broader economy. Housing prices have already dropped nearly 30 percent since their peak in early 2006, in a freefall at the center of the global financial crisis. Shiller, pioneer of the benchmark Standard & Poor's Case-Shiller home price index, told Reuters more declines could derail the country's fragile recovery by dragging more financial institutions to the brink of collapse and further discouraging sorely needed lending. Renewed worries about housing are shared by many economists, given the continuing U.S. foreclosure crisis and the number of Americans who now find themselves "under water," with homes that are worth less than their mortgages. The Case-Shiller index, a measure of housing prices in 20 metropolitan areas, showed impressive gains last summer but it rose just 0.4 percent in October from the previous month on a seasonally adjusted basis. "We saw this big upturn but it seems to be flagging," said Shiller.
When November data is published on Jan. 27, he said the index was likely to post its first overall decline since April, snapping five consecutive months of gains. "I think it's more likely to be a decline than a rise in the next few months," Shiller said. Shiller, 63, spoke in an interview in the palm-fringed retirement and resort community of Boca Raton, north of Miami. He declined to predict a renewed recession or "double-dip" in the overall U.S. economy if real estate prices continue eroding but acknowledged his concerns, despite recent gains in consumer confidence and slower declines in the labor market. "I worry about a double dip and worry about further declines in real estate," he said. "I worry that home prices will resume their fall and then the question is how much further down will they go. We're kind of stretched right now," said Shiller. "There are different estimates of what percentage of homes are under water ... Whatever that number is it can go up dramatically if home prices keep going down. And that would create another default crisis," he added. "This is what has bankers worried right now ... They're expecting a possible future crisis," said Shiller. "People forget that the aftermath of bursting bubbles can be very prolonged ... The last time we had such big bubbles was the Great Depression and that lasted a very long time." He noted that housing prices fell for 15 straight years in Japan after its real estate market collapsed in the 1990s. "Unfortunately, I think it's a model for what might happen," said Shiller."
Source: Reuters
http://www.alertnet.org/thenews/newsdesk/N12200896.htm