[Sixstrings]

Really Scary Fed Charts: NOV, US Bankrupt?: Ben Bittrolff

Ok, somebody smarter than me have a look at that and tell me what it means.

[smallpoxgirl]

The borrowed reserves/non-borrowed reserves thing is mostly semantics. The fed has been lending out lots of cash and lots of T-Bills and taking mortgage backed securities as collateral. Every time they do that, they are taking "non-borrowed reserves" and converting them to "borrowed reserves". That's what's seen in the dramatic fall of non-borrowed reserves with the accompanying rise in borrowed reserves. It's just an accounting shell game. In the end, the bank has to repay the fed loan and take it's mortgage backed security back, so in the end the financial status of the bank isn't any different.

[Sixstrings]

Where do you see this going, Smallpox girl? Like Japan's "Lost Decade"?

If that's what we're looking at, not so bad news.. wasn't the end of the world for Japan, after all.

[lowem]

I don't think I can explain it well enough, but Japan's situation was different from America's current situation.

It's the difference between being a nation of savers versus a nation of spenders, being creditors vs debtors, having a strong manufacturing edge vs having shipped most of your manufacturing overseas.

The results would probably be a little bit different ...

[smallpoxgirl]

I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

[the48thronin]

I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

You left out the part about the global economy not being able to function at some low point and no recovery... very few undulations before a slide over the cliff into localism...

[americandream]

I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

Well explained and succinct. We are on the final run into collapse...with false retracements along the way.

[Minvaren]

Here's another scary graph from this article.

[mattduke]

The borrowed reserves/non-borrowed reserves thing is mostly semantics. The fed has been lending out lots of cash and lots of T-Bills and taking mortgage backed securities as collateral. Every time they do that, they are taking "non-borrowed reserves" and converting them to "borrowed reserves". That's what's seen in the dramatic fall of non-borrowed reserves with the accompanying rise in borrowed reserves. It's just an accounting shell game. In the end, the bank has to repay the fed loan and take it's mortgage backed security back, so in the end the financial status of the bank isn't any different.

All the money ever created by the Fed is "loaned" out and "must be payed back". And yet our money supply grows continuously because the Fed loans ever increasing quantities. "If" these "loans" are "payed back", we will see it in the money supply figures. I would not hold your breath waiting for a contraction.

[frankthetank]

SPG-

You hit it right on the head...

[eastbay]

I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

Well explained and succinct. We are on the final run into collapse...with false retracements along the way.

Wow, this explanation is so clear! I strongly suspect this undulating process will be accompanied by increased state ownership of major sections of the economy.

[Armageddon]

Whenever SPG speaks, she gets my full attention. One smart cookie.

[Zardoz]

...I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

It can't go any other way. Today, right now, we're watching a true Golden Age come to an end.

I've lived my entire (fairly long) life right in the middle of it. I, and others like me, have been members of the luckiest demographic group in the history of the human race. There will never be anything remotely like these times again.

[patience]

Amen to that, Armageddon.

I posted in the "When US defaults" thread that the US is about to hit the wall with financing Treasuries: Liquidity Trap--Tickerforum If the Fed can't get anyone to borrow from the TAF, the whole works is locked up pretty tight.

I guess if/when the US can't sell Treasury bills/bonds/notes, then we are officially bankrupt? Because we are borrowing to pay INTEREST on the National Debt, so..... OMG. Hope we can get out of my wife's Treasury investments in time!

edit: clarity.

[Armageddon]

My father in law has somewhere between 75-100 mill in some sort of government backed bonds or t-bills or something. I always wonder how safe it is. He has been out of stocks for a few years. I don't ask him about it, but I get info from my mother in law. She said it's in the safest place possible. But, I guess if/when the US goes, it goes too.

[emeraldg40]

...I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.

It can't go any other way. Today, right now, we're watching a true Golden Age come to an end.

I've lived my entire (fairly long) life right in the middle of it. I, and others like me, have been members of the luckiest demographic group in the history of the human race. There will never be anything remotely like these times again.

I would agree, but we did come back from the dirty 30's no?

[lowem]

I would agree, but we did come back from the dirty 30's no?

Though the whole war did have to go to war in the 40's to get out of the 30's, but yes.