Via itulip, largo y con muchos muchos datos y graficos. Pongo solo la primera parte. Me lo lei ayer y me gusto mucho.

Creo que viene a decir algo asi como que la caida ya no aumenta en velocidad mas que nada porque hemos llegado al maximo de velocidad de caida... Vamos que hemos llegado a la velocidad terminal de caida. Seguimos cayendo pero aceleramos mas.

Que de green shots nada.

Does USA 2009 = Argentina 2001? Part I: Falling economy reaches terminal velocity - Eric Janszen - iTulip.com

Does USA 2009 = Argentina 2001? Part I: Falling economy reaches terminal velocity

• Slowed by green parachutes
• Bond market suspends disbelief
• Why China is nervous

We have all heard that the U.S. economy cannot go the way of Argentina in 2001 when foreign investors expressed lost confidence in the government and refused to roll over maturing short-term government bonds. Money fled the country as foreign currency reserves dwindled. A balance of payments crisis facilitated by investor panic led to the very outcome investor’s feared: the world’s largest ever sovereign bond default, a collapsing currency, and hyperinflation.

That can never happen here in the U.S., we are told. The U.S. owes its foreign debts in its own currency. U.S. lenders will never shoot themselves in the foot by allowing a dollar debt and currency crisis to develop because they depend on the U.S. for trade to support their own domestic economies. Foreign central banks, such as the People's Bank of China, will continue to step in to rescue the U.S. They will not fail the U.S. as the IMF failed Argentina. They will keep buying U.S. debt forever no matter how large U.S. fiscal deficits become, or how much bad debt the Federal Reserve takes onto its balance sheet, or how long it takes for the U.S. economy to recover.

But this is no more than an argument that the U.S. is not likely to experience a replica of an Argentina 2001 debt and currency crisis, and of course that is true. But that does not mean that a related, equally unseemly but fundamentally different catastrophic result may follow from similar causes and crisis triggers. Evidence abounds that the U.S. is trapped in a cycle if economic contraction and declining creditworthiness from which an Argentine style default with U.S. characteristics is all but inevitable.

Here we take a deep dive into the macro economics of the Argentine crisis—GDP growth, consumption, investment, inflation, industrial production, unemployment and a dozen other details of the Argentine economy in the period before it collapsed at the end of 2001. We compare the same macro economic measures during the U.S. economic crisis that started in 2008.

A few items, such as currency reserves, stand out in ways that show how different the U.S. situation is now from Argentina’s then, but most of the macro economic comparisons reveal astonishing similarities, especially measures of output and inflation.

Argentina and Ka-Poom Theory

We had not re-visited the case of Argentina since 1998 when we developed our now ten-year-old Ka-Poom Theory. We did so because simplistic Keynesian and monetarist models of inflation and deflation neglect the critical factor of capital flows on net debtor economies like the U.S. and Argentina in crisis. In the kind of crisis that is most likely to grip the U.S. with anything but fleeting economic troubles, capital flows become the only economic factor that matters and others that monetarists dwell on, such as bank credit, become irrelevant. "Inflation is always and ever a monetary phenomenon" is great marketing for hawkish monetary policy but lousy economics.

We needed our own theory because we wanted to know what to do with the proceeds of investments in technology companies that we planned to liquidate before the stock market bubble we were in at the time collapsed, which bubble was also a theory to most in 1998 but was to us an fact, its collapse an inevitability to be timed not debated.

Ka-Poom Theory lays out an economic process. It begins with a post credit bubble economic collapse, such as occurred in 2000 and again in 2008, that immediately results in debt deflation and a contraction in bank credit. The credit contraction then spills over into the real economy to produce monetary deflation as demand and output fall. But the period of deflation is brief because the economics orthodoxy of our time calls for radical and immediate fiscal and monetary policy action to slow the contraction of money and credit and boost demand.

We call this part of the Ka-Poom process “disinflation” to distinguish it from the self-reinforcing process of monetary and credit deflation that gripped the U.S. in the 1930s, aka a deflation spiral. No deflation spiral has never occurred anywhere else ever since, yet many economists still opine on deflation spirals and liquidity traps, as if gold backing still held back credit and money expansion as it did in the early 1930s. These economists apparently have not noticed that even during the gold standard era any government wishing to produce money to pay for war first went off the gold standard—temporarily of course—after which money and inflation appeared in abundance no matter the circumstances of the economy, high unemployment or low, high debt levels or low. Since the 1930s governments skip the step of dropping off the gold standard and go right to the printing, and for any number of political purposes other than war. Many have to excess, with Zimbabwe as the most recent and illustrious example. Deflation is the penultimate red herring of modern central banking.

The second inflationary part of the Ka-Poom process occurs if re-inflation of a crashed economy by fiscal and monetary stimulus goes haywire for reasons of trade and finance, as in the case of Argentina in 2001 and dozens of other indebted nations throughout the world before and several since.

Worth noting: in 1998 we used the early 1990s Argentina inflation crisis as one of our models for Ka-Poom Theory as the 2001 version was not yet available. In 1998 the early 1990s Argentina hyperinflation was already a distant memory, and economics papers of the time lauded Argentina’s economic stabilization program that brought inflation down to low single digits. We did not know at the time that Argentina was set up for a recurrence of its 1990s debt crisis and inflation. Paradoxically, the collapse of U.S. stock market bubble in 2000 caused a U.S. recession that spread to Argentina, among other places in the world, and that recession was itself a catalyst for the 2001 Argentine crisis that resulted in hyperinflation there.

Our readers understand economics as an ongoing process rather than a series of disconnected events as deflation and inflation are usually presented. It is not either deflation or inflation, here it is one then the other. The axiom of Ka-Poom Theory, that defines a specific economic, trade, and finance process that occurs under circumstances unique to our time, is that the appearance of a sharp period of deflation after a bubble collapses is in and of itself a warning sign of potential impending out-of-control inflation. That is why we give it a special name disinflation to distinguish it from deflation.

To understand why disinflation in a post-bubble context points to a period of future high inflation we compare the 2000 and 2001 Argentine economy to the economy we are sit inside today here in the U.S. The U.S. escaped the high inflation “Poom” phase in 2002 by dint of the Greenspan credit bubble that produced the housing bubble and others. Will we escape again?

Ben Bernanke 2009 cannot play Paul Volcker 1980

Even as oil and other prices rise to price in future inflation from the Fed’s and Congress’ re-inflation policies, current chairman Ben Bernanke cannot in 2009 raise interest rates as Paul Volcker did in 1980. Conditions then—low unemployment, positive GDP growth, and high inflation—are the precise opposite of those that prevail here in the middle of our FIRE Economy Depression.

Argentina's economy started to blow up when its fiscal deficit exceeded 3% of GDP in 2001 and its gross external debt, the majority of it short term, exceeded 55% of GDP while the nation fell into recession. The recession reduced the nation's economic output and thus its ability to earn income to repay its foreign debts.

The CBO projects the U.S. fiscal deficit at 12.3% in 2009, and increasingly short-term external debt now exceeds 100% of GDP. Meanwhile GDP is shrinking. U.S. Q1 2009 GDP growth came in at minus 6.3% and 5.5% in Q1 2009, setting the stage for an Argentina type crash, but with American characteristics. In fact, if the U.S. were any other country that owed so much to so many but in foreign currencies we’d have seen a “Poom” inflationary event long ago.

The fact that the U.S. owes its foreign debt in dollars only limits the extent and speed of an Argentina type economic crisis for the U.S. Counter intuitively, if monetary and fiscal policy today allowed the money supply to fall, and demand and economic output to decline further, and CPI inflation to fall below 2% or so, a debt and currency crisis for the U.S. is virtually assured.

If Bernanke pulled a Volcker today, raising interest rates and cutting the money supply, he’d launch a process to send the U.S. economy into a hyperinflation.

The circumstances facing the U.S. today and in 1980 are apples and oranges.


The Paul Volcker Fed raised interest rates when unemployment was low and falling, and inflation was high and rising. Today unemployment is high and rising, and inflation low and falling, although rising long term interest rates and commodities are pricing in future inflation.

With high unemployment and negative GDP, how can the Fed raise interest rates? In this environment high interest rates are the greatest risk to economic growth and output, and thus U.S. ability to repay debts. If the idea of raising them is to reduce inflation and interest rates, we will see the opposite of that intended result. That is why we do not expect to see short term interest rates raised until early 2011, but expect to see long term rates as high as 7% by the end of 2010.

Eerie Timely Parallels between Argentina and the U.S. economies

Argentina’s economy collapsed at the end of 2001 after a decade of mismanagement of the political economy led to a year of financial and economic turmoil that culminated in sovereign debt default, collapse of the currency, and hyperinflation.

As much as the Argentina economy may appear on the surface to not apply to the U.S.--Argentina is not a superpower that issues the world’s leading reserve currency--basic laws of economics, trade, and finance can be stretched but not broken.



Argentina broke several laws in the year 2001 and paid dearly for it. The U.S. between mid 2008 and 2009 broke more than one economic law, aggressively flaunted others, and is on the verge of breaking several more. We cannot accept uncritically the conceit that U.S. geopolitical advantages give our economy a permanent get out of jail free card. Thresholds of tolerance may be exceeded, we just don’t know exactly where they are. We are getting close if Chinese officials are openly discussing alternatives, and this airing of grievances is in fact part of the leading edge of the "Poom" process as in Argentina in the period before the actual crisis.

The latest: A top Communist Party research chief said Thursday that China should buy gold and U.S. real estate rather than Treasuries, according to a Reuters report.


Why China is nervous

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bueno bueno fijaos lo que dicen aqui:

Asi sera el reset! no hay deudas ni tampoco ahorros!! yupi!!

We are going to wake up one morning and Matt Lauer will inform us of the following. “I’ve got good news and bad news for you, America. The good news, for most of you, is that there is no more debt. No government debt, personal debt or corporate debt. You get to keep what you have, your house, your cars, your flat screen TVs. You owe nothing. The bad news, for some of you, is that there are no assets. Your bank accounts are empty, all stock is worthless, and there is nothing in your 401K or IRA.”

None of our “leaders” in D.C. will want to take the blame for this, and will need an excuse for this. Most people will understand and even forgive how this happened when Matt goes on to say:

“What I have told you is the direct result of a computer virus that has infected the worldwide financial complex that completely melted the balance sheets so that no one knows who owes what to whom anymore. This is why we have to start over. Just think of it as hitting the reset button. Details on the new government monetary system will come out shortly.” Problem solved, all absolved.



The Coming Economic Apocalypse :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

The Coming Economic Apocalypse
Economics / Great Depression II
Jun 28, 2009 - 12:00 PM

By: Roy_F_Grieder



Astonishing to me is the fact that no one seems to understand the ultimate result of the current policies and practices of Washington D.C. and the Federal Reserve Bank, the Fed. I have studied our economic situation for about 3 hours per day for the last 8 months and conclude we are bankrupt. Think about the facts.


Certainly most of the automobile industry, the airlines, 37 out of 50 states, are bankrupt. The lending industry, Fannie Mae, Freddie Mac are bankrupt. Insurance giant AIG, bankrupt. The Pension Benefit Guarantee Corporation, or PBGC, the Federal Deposit Insurance Corporation, or FDIC, Social Security including Medicare and Medicaid are rapidly approaching insolvency.

In 1929 personal and corporate debt had risen to 365% of Gross Domestic Product, or GDP, before the Crash. We are now at 375% of GDP. So all of this excessive credit got us into this mess in the first place, right?. And the government and Fed solution to this mess is to print up an extra trillion dollars or so, give it to the lending industry and yell “Lend!, Lend!”. That should work, right?.

Remember TARP?, the money given to the banks and others to remove their “Toxic Assets” (sorry too harsh, let’s rename them “Troubled Assets.) Well, the toxins still remain. They exist in the form of Financial Derivatives, Credit Default Swaps, or CDS, and Collateralized Debt Obligations, or CDO. These financial instruments sound complicated, and they are. They are the inventions of Wall Street wunderkinds, the ones that get paid a couple of millions per year for their “brilliance“. The worldwide market (if you could call it that) or value of CDS is in the neighborhood of 600 trillion dollars, or 10 times the entire Worlds yearly economic output. How the banks and insurance giants are to clear their balance sheets of these toxins is no mystery . They cannot. Was it wise to take TARP money, 20 billion dollars, give it to General Motors when their market cap (the value of their common stock) was 985 million?. Will they pay us back?. No. They are bankrupt. The TARP was a fraud from the start, but it has bought the powers that be some time. Time, time for what?

There is a fever pitch rush to consolidate control over us by the government and the Fed. Look what they are doing to the banks, insurance, lending institutions, auto industry, airlines. Let’s now add health care. By the way, let’s appoint czars and give them power not granted by the Constitution. Why?, what’s the rush? To gain control before we go “out of control”?.

And now 37 out of 50 bankrupt states need to raise fees and taxes, and so does our federal government to pay for “free” healthcare. Raise taxes during a deep recession?, worked great in the early 1930’s, right?. Are these people idiots? Yes they are. Why not have a 2 trillion dollar deficit this year, and run up the national debt to 20 trillion dollars in a few years. Interest on the debt would only be 1 trillion a year at 5 per cent. Chump change. Government borrowing on such a massive scale will compete for the money in the open market and will make overall interest rates rise . Rates already rose a few weeks ago during a large treasury auction. Watch this carefully, mortgage rates will respond by going up. Think what this will do to the already very ill housing market.

Some “experts” as of late say they see “green shoots”, signs of economic recovery. What they “see” may be self-serving or it could be these people are delusional. The Fed Chief, Treasury Secretary, Congress and the President are lying to us. We are bankrupt and they know it. You can put a bandage on a gangrenous appendage and it looks fine, but if the appendage is not amputated the body will die. A bandage is all that is being applied to this gangrenous economy. Toxic.

So, where are we headed?. I suppose the Fed and the Treasury could just continue to print more money. Right up to the point it becomes worthless. The Weimar Republic of 1930’s Germany tried this. In the end the “money” was used to start a fire in a stove or was used as toilet paper. D.C. is too smart for this, right? Is there another way out of this mess?.

During my research I floated the following question to 10 people of various economic means. “If you were told you had no more debt but got to keep what you had, but also you had nothing in your bank or 401K or stocks or IRA, just start anew” 9 out of 10 replied “That works for me”. Astounding, but very telling. How these people responded, along with my research, and what is unfolding (actually unraveling) leads me to the following.

We are going to wake up one morning and Matt Lauer will inform us of the following. “I’ve got good news and bad news for you, America. The good news, for most of you, is that there is no more debt. No government debt, personal debt or corporate debt. You get to keep what you have, your house, your cars, your flat screen TVs. You owe nothing. The bad news, for some of you, is that there are no assets. Your bank accounts are empty, all stock is worthless, and there is nothing in your 401K or IRA.”

None of our “leaders” in D.C. will want to take the blame for this, and will need an excuse for this. Most people will understand and even forgive how this happened when Matt goes on to say:

“What I have told you is the direct result of a computer virus that has infected the worldwide financial complex that completely melted the balance sheets so that no one knows who owes what to whom anymore. This is why we have to start over. Just think of it as hitting the reset button. Details on the new government monetary system will come out shortly.” Problem solved, all absolved.

When the firestorm arrives, you will be glad you live in New Hampshire. At least here we may have a chance. During the dark days of the 1930’s peoples faith and morality held society together. Not so today sadly. Talk with your family, friends and neighbors. Come up with a plan. Things are about to become ugly. Very Ugly.

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Seria tremendo...

Pensar que en España el 60% de los sueldos no llegan a los 1.000€
Hay 5 millones de parados, creo que la noticia seria buena para la mayoría.
Que la fiesta la pagaran los ricos, pero de verdad.

El problema que el 100% de los que tendrian que aprobar eso en el parlamento, no entran dentro del 60% que mencionaba anteriormente.
Y no lo permitirian.

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Este articulo es basura pura. Da por sentado cosas que no pasaron.

1º - Argentina ya estaba en recesión a finales del 99
2º - " collapse of currency" está mal contextualizado: El peso Argentino tenía una sobrevaloración artificial, que lo hacia intercambiable 1 a 1 con el dolar por una ley del banco central. Cuando derogaron esa ley, la moneda sufrío una fuerte devaluación, pero de golpe y de una sola vez.
3º - En la crisis del 2001 no hubo hiperinflacíon, sino todo lo contrario, una deflacíon de caballo. Después, un periodo de estabilidad de precios, para dar paso a una inflación moderada a alta; cabe aclarar que después de crecer 4 años consecutivos al 8% anual.

Hay que tener precaución con estos goldbugs y agoreros varios.

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aqui la tenemos:

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