CHART SHOCK: Consumer Debt To GDP -- 'UGLY' Would Be An Understatement -- Much More Deleveraging Ahead

One glance at this beauty shows that consumers have barely begun the process of deleveraging.  It's going to be several more years before household balance sheets are repaired and ready to assume more debt.  Hello, Tokyo.

12 more charts below.

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By Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney, and author of the book Debunking Economics.

The aggregate data is unambiguous: the US economy is delevering in a way that it hasn’t done since the Great Depression, from debt levels that are the highest in its history. The aggregate private debt to GDP ratio is now 267%,  versus the peak level of 298% achieved back in February 2009–an absolute fall of 31 points and a percentage fall of 10.3% from the peak.

Read Dr. Keen's full article (more charts and analysis):

• Deleveraging with a twist

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Chart archive:

• Obamacare Complicated? Check Out The Flow Chart (MUST SEE)

• CHART PORN: Video Of Economic Collapse Set To Music

• CHART SHOCK: The REAL Unemployment Rate Is 22%

• MUST SEE HOUSING CHART: Home Sales Meets The Mother Of All Recessions

• CHART TRUTH: Holy Tokyo! Check Out How Closely The U.S. Stock Market Has Mirrored Japan

• CHART: FDIC WATCH LIST: 829 problematic banks in Q2

• You Gotta See This -- Map Of U.S. States By World GDP

• Banks That Went Bust: Interactive FDIC Bank Failure Map

• Nationwide Unemployment County By County (Time Lapse '06-'09)

• Tracking The Nation's Bank Failures (Very Cool WSJ Interactive Map)

• Must See Charts -- Housing Cliffdives, U.S. GDP By Decade, History Of World GDP, Deficits With/Without The Iraq War

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Comments

[DailyBail]

http://www.guardian.co.uk/world/2010/sep/21/vatican-bank-chief-investigated-laundering

Vatican bank chief investigated over money laundering claims

In unprecedented move, judge freezes €23m held in account at financial institution with close church links

[DailyBail]

Italy’s finance police have seized €23m held by the Vatican in an Italian bank while the pope’s top two bankers have been placed under investigation for suspected money laundering.

Police confirmed Italian media reports that they had confiscated the funds held by the Institute for Religious Works (IOR) – the Vatican’s bank – in an account at Credito Artigiano, an Italian bank, following suspicions raised by the Bank of Italy over two attempted transfers.

http://www.ft.com/cms/s/0/39b1cbb6-c587-11df-9563-00144feab49a.html

[DailyBail]

The Federal Reserve has opened the door to buying billions of dollars of Treasury bonds in a further programme of quantitative easing by making a substantial change to the policy statement issued after its September meeting.

The rate-setting Federal Open Market Committee said on Tuesday that it “is prepared to provide additional accommodation if needed to support the economic recovery”, displaying a bias towards easing absent from its last policy statement.

http://www.ft.com/cms/s/0/87cb65de-c5a8-11df-ab48-00144feab49a.html

[DailyBail]

Clinton to unveil US funds for clean cookstove push

http://www.alertnet.org/thenews/newsdesk/N20177469.htm

$50 million more of your cash...out the door...

[DailyBail]

Deleveraging with a twist

http://www.debtdeflation.com/blogs/2010/09/20/deleveraging-with-a-twist/

[DailyBail]

The "Deleveraging" Deception

Michael Pento, EuroPac

http://www.businessinsider.com/the-deleveraging-deception-2010-9?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29&utm_content=FeedBurner

Great read...

[DailyBail]

Don’t Worry About China, Japan Will Finance U.S. Debt

http://blogs.wsj.com/economics/2010/09/15/dont-worry-about-china-japan-will-finance-us-debt/

[DailyBail]

LOS ANGELES—Federal Reserve Chairman Alan Greenspan once again found himself in legal trouble Monday, when he and several members of his extensive entourage were arrested for allegedly destroying a penthouse suite at the Beverly Hills Hotel.

http://www.theonion.com/articles/greenspan-entourage-demolish-hotel-room,673/

[DailyBail]

More than 850,000 people were arrested for marijuana violations in 2009 -- the second biggest haul in American history, according to the annual Uniform Crime Report released by the FBI Wednesday. Despite the increased enforcement, however, marijuana use rose in the past year, according to the National Survey On Drug Use and Health released Thursday by the Office of National Drug Control Policy.

http://www.huffingtonpost.com/2010/09/16/marijuana-use-arrests-up-kerlikowske_n_719989.html

[DailyBail]

Just Say Now: Legalize Marijuana

http://firedoglake.com/justsaynow/

[DailyBail]

Now is the time to legalize marijuana.

Just Say Now is dedicated to making marijuana legal. It’s a huge campaign to pass marijuana legalization state by state.

Organized by progressive blog Firedoglake.com and grassroots group Students for Sensible Drug Policy, we’ll turn out voters and make the difference in key elections.

Sign up to get updates from Just Say Now on how you can help make marijuana legal.

http://firedoglake.com/justsaynow/just-say-now-sign-the-petition

[DailyBail]

Republican Voters Pushing Out TARP Supporters

http://www.minyanville.com/businessmarkets/articles/tarp-republican-voters-primary-gop-candidates/9/15/2010/id/30110

[DailyBail]

ST. LOUIS — When judges here sentence convicted criminals, a new and unusual variable is available for them to consider: what a given punishment will cost the State of Missouri.

For someone convicted of endangering the welfare of a child, for instance, a judge might now learn that a three-year prison sentence would run more than $37,000 while probation would cost $6,770. A second-degree robber, a judge could be told, would carry a price tag of less than $9,000 for five years of intensive probation, but more than $50,000 for a comparable prison sentence and parole afterward. The bill for a murderer’s 30-year prison term: $504,690.

Legal experts say no other state systematically provides such information to judges, a practice put into effect here last month by the state’s sentencing advisory commission, an appointed board that offers guidance on criminal sentencing.

http://www.nytimes.com/2010/09/19/us/19judges.html?hp

Great story...

[Dane]

With money on the line, the bail agent has a financial interest in supervising bailees, and ensuring that they appear in court each end every time the court orders them to appear. If the defendant does not appear in court (skips), the bail agent has time and the financial incentive to find the defendant and bring him/her to court.



http://www.atbail.com/

[josie]

The Keen article and charts are ugly and scary. But, I guess we should not be surprised. Debt fueled our economy and as deleveraging slows, our economy "boosts." This will not end well--ugly and scary.

[Debtline]

Looking at Federal Reserve data, both total household debt and mortgage debt outstanding dropped in the third quarter, for the largest drop in 40 years. As I wrote almost two years ago, the disappearance of Mortgage Equity Withdrawals is having a negative impact of about 3% on US GDP. Evidence shows that this is also happening in Great Britain and other parts of Europe where there was a housing bubble.
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Earl Nunes

[Dr. Pitchfork]

Good call, Earl.
--
DB, I'm glad you reposted this. Watching the Today Show this morning (I'm at my parents' for Christmas), some guy was telling viewers that "The best investment you can make is not stocks or bonds....but to pay down debt. Even at today's low rates." (I'm quoting ffrom memory). He really hammered that message home. Whether we "double dip" or not is really beside the point. It's a long, hard slog from here in terms of growth.

[Tom Dennen]

http://beforeitsnews.com/story/233/407/Top_Ten_countries_External_debt-to-GDP_ratio._Same_list_has_names_of_countries_with_blood_in_their_streets._Whos_next_by_Tom_Dennen.html

[John S]

I notice on the chart that more than half of the deleveraging between 1933 and 1945 was helped by a World War that left 50 million dead and destroyed the infrastructure of 80 percent of the world. Perhaps there's a lesson here that the Obama administration will follow up.

[DailyBail]

@john s...

let's hope not...

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@pitchfork...

yes we have far still to travel on the deleveraging path...

[Denver Bail Bonds]

Nice article. and the comment section also boost my knowledge.

Regards
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[VIP Bail Bonds]

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