06/01/10 Baltimore, Maryland – Back in the USA, it’s still fat city. Thanks to fear of European debt, the waiters are bringing the sundaes to the US.
And here’s our own Number One ice cream salesman – Tim Geithner – in Europe. He was in Berlin on Thursday. What flavor was he pushing onto the Germans? Tutti Frutti!
He told the Germans that the US was “totally behind a cooperative, worldwide approach.”
In other words, instead of letting bad debt go bad on a case by case basis…as it should…the idea is to put it all together…get the whole world in on it…so then the whole world’s credit will go bad!
But make no mistake. As the quantity of debt increases, the quality of the credits falls. It doesn’t matter if you spread it out…or concentrate it…or put it off…or put on a fruit topping. You eat too much of this rich dessert and you’re going to throw up.
Europe is reluctantly still adding debt… America is eagerly adding debt. And all the debt is becoming less effective and less valuable. Sooner or later, lenders will cut off the ice cream sundaes to all of them….
Yes, dear reader, this Great Correction has a long way to go and a lot of work to do. But at least it is underway… Now that we see the savings rate move up again, there’s not much doubt left.
There is no recovery…and no going back to the bad habits of the Bubble Epoch…
So forget the bailouts, boondoggles, and transfer payments… Pay no attention to Wall Street or Tim Geithner. Don’t bother to listen to CNBC…
You already know what is going on.
It’s the de-leveraging, stupid!
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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You always know how to make me feel all warm and cozy Bill
When the ice is melting you’ll see a lot of people naked.
I’m curious….How is the “rate of savings” measured.
If it is measured by declining consumer sales, that doesn’t mean the consumer public at large is “saving” it just might mean that due to unemployment, losses in retirement funds, pressure from other necessities (that are not included in the GDP numbers) like food and energy, insurances, etc…..they don’t have the money to spend…..not that we are “saving” more.
How are the numbers measured????
Is it my sick PC setup or is Bill green (from being an alien or eating too much ice cream) and wearing a pink/purple shirt? Leaving those questions aside, I’m sure he has a clearer view of reality than those at the helm; how could the course they have steered be so disastrous?