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overtheedge
Member since May 2012
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A Steaming Stream of Tweet

- David Galland - Casey Research

"Under most circumstances, an economy without debt would be both poor and stagnant."
If by most circumstances you mean under a fiat monetary system dependent on fractional reserve banking, then yes. Otherwise, you have no evidence to support the notion under a hard money regime. One person's debt is another person's interest income. Debt is only important for financing a profit-seeking enterprise. Even then, debt is avoidable by selling shares in the business to gain the required finances.
100 years ago, the US was relatively prosperous and the debt load was minimal compared to nowadays. Inflation/deflation was minimal when hard money was king. Money retained its purchasing power.

"For capital-rich societies such as the United States, excesses in unproductive debt can go on for decades before the system breaks down. "
Not "can go on", but rather has gone on. If you listen closely, you can hear the inevitable approach of the on-coming extreme breakage event.

"Remember, credit and debt is money; and if credit and debt contracts, it follows that money also contracts, which of course is the very definition of a deflation."
Credit and debt are anti-money. Otherwise we can make everyone wealthy by granting them an outrageous line of credit. And all the folks with spirit-crushing debt would be fabulously rich. Your whole sentence reeked of FedSpeak.

And just a short comment on your Argentine escape plans. When the global SHTF, do you really think Americans will still be welcomed in foreign countries with open arms? That would defy centuries of recorded history. In the final analysis, homo sapiens is just another dumb animal and will react as a dumb animal to stimuli they have no control over, i.e. fight, flight, or fright freeze. An American on foreign soil after the collapse is no more than spoiled meat. So you might wanna run the family escape scenario from deep in enemy territory through a detailed analysis for success potential. Don't forget, there will be capital controls everywhere. And everyone will be playing the blame game with Americans the designated fall-guys. If you are gonna manage the world's reserve currency, you best not screw it up. Oops, too late.

Commented 4104 days ago

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Beginning of the headline : This edition of The Room consists mainly of items that have washed up on the desktop this week that I felt worthy of your attention. We also have a guest article by correspondent Hans Fredrick Hansen on the topic of how long the US economy will be able to continue trudging forward under the heavy load of its unproductive debt. But before we get down to the harder stuff of economics, let's take a quick look under the hood at the naked intentions of the unindicted co-conspirators... Read More

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