Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and mining shares.

The Campaign to Cancel the Washington National Debt By 12/22/2013 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts

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The current crisis might be characterized as an example of the final stage of a well-known boom-and-bust pattern that has been repeated so many times in the course of economic history. There are, nevertheless, some aspects that make this crisis different from its predecessors: First, the preceding boom had its origin – at least to a large part – in the development of new financial products that opened up new investment possibilities (while most previous crises were the consequence of overinvestment in new physical investment possibilities). Second, the global dimension of the current crisis is due to the increased connectivity of our already highly interconnected financial system. Both aspects have been largely ignored by academic economics.
http://www.debtdeflation.com/blogs/wp-content/uploads/papers/Dahlem_Report_EconCrisis021809.pdf

Borrowing massive amounts of money pays for the transition from a debt-financed consumption based economy to a savings-financed investment based economy.

What should happen is that consumption goes down, investment goes up, demand stays the same. If you increase savings it changes the components of GDP, but it doesn’t change GDP itself. Less money spent on buying consumer goods, more money available to build new factories.

Where this breaks down is that it requires banks that takes savings and then creates loans, and if you have sick banks, then this isn’t happening.

sorry to interrupt your chat with 2 fish but do you really believe that China’s reserves are really to back up its exports? (re your last comment: it would not depend so much on export and therefore would not need that much reserves)Whatever China’s yuan policy, its dependence on export would have been hard to change as it is now. Turning an ocean liner requires as much luck as time, capacity and foresight /planning, not to mention enough deep blue sea. changing from export oriented to consumption based is not something which can be done in a couple of years.

as for the treasuries issue, perhaps Hilary Clinton’s sales pitch is alreafdy a clue in itself?!