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HK_L61
Nov 13, 2021 1:56 PM

Total Liabilities : GDP / Macro Review 01 

FRED:WLTLECL/FRED:GDP1D
WLTLECL/GDPFRED

Description

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The Ratio Expansion is unprecedented in US HIstory.

A clear pattern emerges after the initial Apex - the
gentle stair-step higher into higher and higher Highs.

Debt itself remains the Life-Support of the US Economy.

The Debt to GDP ratio is the Probability of a Nations
ability to Pay Its Debts.

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Corporate Equity to GDP has reached ~220% - in 2008
it peaked at ~150%.

The Equity Complex remains the Center of the
US Economy and GDP.

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Credit Cycle Expansions eventually return to the Mean
after extreme periods of dislocation in Debt Markets begin
to Fail to Settle.

The 30 Yr Bond Auction's Failure is a late-stage warning
sign the appetite for Debt at present Rates of Yield is
unacceptable.



Comment

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@ $171 Trillion in Unfunded - the Ratio is Anomalous in Recorded History.
Trend AnalysisChart PatternsFundamental Analysisdebtliabilitiesdebtgdp
Comments
Infidel777
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Great FKN post! What a chart!
HK_L61
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@Infidel777, A remarkable Rate of Change.

It will go Zimbabwe at some point, is that level 250%...

Only the Operators know.

Or - it collapses, from where... up to the Operators.

Then Digi Chits for all us Peeps.
travelerjm
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Less demand (FED), more supply (Treasury) - short-term debt yield should rise faster than 30yr. Still sustainable? Yes. ECB is not likely to slow injection. And China is about to move.
HK_L61
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@travelerjm, The balance of the Globe is tightening.
SPYvsGME
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Do you think banking stress tests have anything to do with the pullbacks from each high? The most recent tests were between April/March and June/July. federalreserve.gov/newsevents/pressreleases/bcreg20210624a.htm
HK_L61
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@SPYvsGME, No, the persistent Debt creation is what is driving Price.

The Salient Issue is the Cost of doing so, ie. Yields.

Banks benefit from Higher Rates IF they are lending.

They are not.
SPYvsGME
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@HK_L61, thanks that makes sense. 1 other question. Do you think Canada is acting soon enough by ending bond purchase programs?
HK_L61
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@SPYvsGME, They are guided by the BOE - simply following their Lead.

As for soon enough... it's far too late for that.

Canada, like ALL Nations, do not have the ability to pay DEBT in anything
other than Zimbabwe $.
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