Austerity vs Growth

[gumOnShoe]

Some facts about our situation.

1) Businesses are not prospering because there isn't any demand.
2) Corporate profits & the wealth of the rich are at an all time high, but wages are falling or stagnant.
3) The recovery is stalling.
4) Food, gas, and other necessities due to regular inflation remain as high as they did at the beginning of the economic slump in 2008.
(3 & 4 are observable)
5) The U.S. government is the main source of layoffs. (See the latest jobs report)
6) The private market continues to hire at a rate slower than new workers graduate from school.

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Some logical extrapolations

A) In order for there to be demand, there must be individuals capable and ready to buy goods.
B) In order for there to be people ready and capable to buy goods, there have to be people with money.
C) In order for businesses to profit they must not spend money they could have.
D) If a business does not pay its workers more, it will profit more in the short term.
E) If every business does not pay its workers sufficiently, workers will be poor.
F) If all workers are poor, demand will fall.
G) If demand falls, businesses can't make more money.

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Starting a Business

I) If you want to start a business, you find investors.
II) If you can't find investors, you take on debt to get off the ground.
III) You expect to not make profit for the first year of your business.
IV) If you are successful in your business, you can pay off the debt once your company is doing well.

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Debt

1) You take on debt when you need more money than you have.
2) In order pay debt off, you must be taking in more money than you are spending.
3) If you are paying down debt, you increase your net value, but not your capacity to do anything other than take out more loans.

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Government

1) The government is an employer.
2) The government has debt.
3) The government is not profiting.
4) Taxes are the main source of revenue for the government.
5) Debt is a means of paying the bills that aren't debt related.

A) If the government wants to pay off the debt, it needs to profit.
B) In order to profit the government needs to generate revenue.
C) If the government can't generate revenue, debt must either remain the same or grow.

I) If the government wants to pay its employees, the government needs to generate revenue or take on debt.
II) If the government does gets rid of its employees, there are more poor people unless other people take those people on.
III) If the government does not get rid of its employees or pay them less, it must take on more debt, increase taxes, or find a way to stimulate the economy so that its people generate more tax revenue using the current rates.

Given all of the above, what conclusions do we know?

1) The government is cutting jobs and freezing pay.
2) The private sector is hoarding money, freezing pay, and hiring very, very slowly because there is no demand.
3) Both 1 & 2 lead to low demand.
4) Attempts to pay off the debt leads to lower demand.
5) Lower demand means lower tax revenue.

This largely means our economy is in a depressed state. The united states is in a very weak recovery/stagnation. But the global economy is rocky as a whole and is not growing. There is no demand from anywhere.

Economists have a name for this. Its called a depression. We are in the second great depression. And austerity has put us here. I'd like to ask you how you think we're supposed to get out of this given the above. I'll give you a hint, the section on starting a business is a clue. And there is a history lesson you might learn from as well. The world was depressed once in the last century. We got out of it. The answer is very clear. Its known. Nobel Prize Winning Economists agree.

There's only one path forward that we want and that's growth, and there's only one way I know of to do it. And that is that we need to create a demand so large it rivals the needs of the opposing forces of a world war.

[Th-e]

We are in the second great depression. And austerity has put us here.

Umm...so Europe is to blame for all of our economic woes?
Also, if we are in the Second Great Depression, then western society has become too dumb to function anymore, and our society is a lost cause, forever.

Anyway...

1. Europe has been doing the whole Austerity thing. The U.S. hasn't.

2. Prior to 2009, the United States has never had a budget deficit above $500 BILLION. But since 2009, we have been dealing with incessant TRILLION dollar deficits each year since then!!!

3. Austerity has mutilated Greece and Spain. Austerity in a bad economy takes away growth, leading to more debt when trying to stop debt.

4. For all of that American spending, the economy has seen little growth. If anything, we're performing the Japanese mistake. America spends, but it doesn't grow from it!!!

If America continues this extreme spending, it will have to face austerity eventually, regardless of the amount of growth. Otherwise, we will someday be unable to borrow.

Where has all this money gone???

[MOSFET]

Where has all this money gone???

To the top.

[gumOnShoe]

At 6/5/12 04:42 PM, Th-e wrote:

We are in the second great depression. And austerity has put us here.

Umm...so Europe is to blame for all of our economic woes?

Some, because their lack of demand ultimately hurts our economy.

Also, if we are in the Second Great Depression, then western society has become too dumb to function anymore, and our society is a lost cause, forever.

I wouldn't go that far, but I would say that our leaders practice voodoo when it comes to economic policy. That is, they believe things that sound wonderful and appropriate, but which hold know real truth value.

Anyway...

1. Europe has been doing the whole Austerity thing. The U.S. hasn't.

The U.S. Federal Government implemented a stimulus. Now that those funds are worn out and states are cutting their budgets we are implementing austerity practices now.

2. Prior to 2009, the United States has never had a budget deficit above $500 BILLION. But since 2009, we have been dealing with incessant TRILLION dollar deficits each year since then!!!

So what? Prior to 2009 the money that went to the wars in Iraq and Afghanistan was kept off the books. Prior to 2009 we weren't addressing our economic problems here at home. A trillion isn't necessarily scarier than a billion. If we are willing to actually implement sound economic policy, taking out more loans now to get our country back on track is fine. When the economy rebounds, we can worry about paying down the debt. We can't pay down the debt while everyone else tries to or demand falls sharply and the economy dies.

3. Austerity has mutilated Greece and Spain. Austerity in a bad economy takes away growth, leading to more debt when trying to stop debt.

Yes.

4. For all of that American spending, the economy has seen little growth. If anything, we're performing the Japanese mistake. America spends, but it doesn't grow from it!!!

Mostly because we were filling a vacuum that the private industry stopped filling. So, what you saw was that we fell, but not as hard as we would have. This may be hard to understand, but had the car industry gone under we would have been watching a chain reaction of the destruction of american businesses outside of the financial districts.

Also, half of the stimulus was more tax cuts. Which is fine, but it doesn't promote new business and growth, it just gives people who are doing what we're already doing a little more to spend at walmart or mcdonalds.

If America continues this extreme spending, it will have to face austerity eventually, regardless of the amount of growth. Otherwise, we will someday be unable to borrow.

Not really.

Where has all this money gone???

As it was said to the top and out.

[bismuthfeldspar]

Insufficient credit results in underuse of capital but excessive credit results in inefficient allocation of capital.

While it is true that the austerityholes would keep us in recession, at a certain point aggregate demand exceeds sustainability, ideally government financial policy should reflect financial reality. I'm just saying, Krugman spends most of his time writing columns and books aimed at democrat fans, I'm sure there are more reliable sources we can look to in order to discover how much of the depression is due to lack of demand and how much is due to practical reasons like competition, land, resources, labor, physical capital and technology. I think you just chose Krugman because he is controversial or you're a fan or something.

[gumOnShoe]

At 6/6/12 10:06 PM, bismuthfeldspar wrote: Insufficient credit results in underuse of capital but excessive credit results in inefficient allocation of capital.

Do we have excessive credit right now? Is credit the problem with out ecnomy? Are people borrowing so much money right now and spending it willy nilly? I think we both know the answer to that question.

While it is true that the austerityholes would keep us in recession, at a certain point aggregate demand exceeds sustainability, ideally government financial policy should reflect financial reality.

And what exactly is that reality right now? And what exact policy do you think reflects what when? You used a whole bunch of economic terms and committed to nothing.

I'm just saying, Krugman ....

I'm not going to respond to the disparaging Ad Hominem remarks that follow the above. Address the arguments or present another source, if you have a problem.

[MOSFET]

At 6/6/12 10:06 PM, bismuthfeldspar wrote: Insufficient credit results in underuse of capital but excessive credit results in inefficient allocation of capital.

While it is true that the austerityholes would keep us in recession, at a certain point aggregate demand exceeds sustainability, ideally government financial policy should reflect financial reality. I'm just saying, Krugman spends most of his time writing columns and books aimed at democrat fans, I'm sure there are more reliable sources we can look to in order to discover how much of the depression is due to lack of demand and how much is due to practical reasons like competition, land, resources, labor, physical capital and technology. I think you just chose Krugman because he is controversial or you're a fan or something.

Should aggregate demand exceed sustainability, then the government should, ideally, cut back on its own spending and try to rake in its "profits" by enjoying the excess economic activity(and not give out unpaid for tax cuts). It almost sounds like you believe aggregate demand is only government spending.

[bismuthfeldspar]

At 6/7/12 09:56 AM, gumOnShoe wrote:

At 6/6/12 10:06 PM, bismuthfeldspar wrote:

Do we have excessive credit right now? Is credit the problem with out ecnomy? Are people borrowing so much money right now and spending it willy nilly? I think we both know the answer to that question.

Politicians don't push corruption to the point where it appears "willy nilly", it's their job to reduce public suspicion about their activities after all. Usually they push corruption up until the point an impartial expert says "my calculations show that this might be a bit too much" at which point they say "well, this here is my buddy Kruppman and he's a super top economist primo excellente and he says it's well within the margin of error, ain't that right Kruppman old buddy old pal" then try to find less visible means of pushing it further.

:Ad Hominem
I just said Paul Krugman was biased, everyone is biased to a certain degree. If I were to say he is wrong because he looks like a garden gnome that would be an ad hominem attack.

And what exactly is that reality right now? And what exact policy do you think reflects what when? You used a whole bunch of economic terms and committed to nothing.

All I'm saying is economists who regularly clink stemware with politicians aren't the only economists, if you want a clearer picture of the situation you may need to widen your sources. I am committed to facts and logic, that's all.

http://money.cnn.com/2010/01/27/news/economy/Roubini_Davos/i ndex.htm
Apparently Krugman also believes politics should not play a role in economics and is particularly critical of conservative politics in economics but in doing so he provides a nice list of alternative viewpoints which are worth looking into purely because Krugman has expressed discontent with them.
http://krugman.blogs.nytimes.com/2009/01/19/economists-ideol ogy-and-stimulus/

At 6/7/12 04:06 PM, MOSFET wrote: Should aggregate demand exceed sustainability, then the government should, ideally, cut back on its own spending and try to rake in its "profits" by enjoying the excess economic activity(and not give out unpaid for tax cuts). It almost sounds like you believe aggregate demand is only government spending.

Of course there are other factors, I'm just looking in detail at the effect of government spending. Keynes in fact said we should reel it back in after the recession is over, it's neokeynesians who keep trying to milk this excuse for all it's worth. The government should give corporations access to the money supply to stimulate the economy, if it is not properly marketized though it will only end up in housing bubbles and the like and won't be put to much good use overall.

[gumOnShoe]

At 6/7/12 08:54 PM, bismuthfeldspar wrote:

At 6/7/12 09:56 AM, gumOnShoe wrote:

At 6/6/12 10:06 PM, bismuthfeldspar wrote:

Do we have excessive credit right now? Is credit the problem with out ecnomy? Are people borrowing so much money right now and spending it willy nilly? I think we both know the answer to that question.

Politicians don't push corruption to the point where it appears "willy nilly", it's their job to reduce public suspicion about their activities after all. Usually they push corruption up until the point an impartial expert says "my calculations show that this might be a bit too much" at which point they say "well, this here is my buddy Kruppman and he's a super top economist primo excellente and he says it's well within the margin of error, ain't that right Kruppman old buddy old pal" then try to find less visible means of pushing it further.

You rant about corruption when I asked the following:

Do we have excessive credit right now?

Are people borrowing so much money right now and spending it willy nilly?

You latched on to the willy nilly and put it on the public sector when I was talking about all sectors. Stay on topic please. When you are ready to answer my original questions, please do so.

Ad Hominem

I just said Paul Krugman was biased, everyone is biased to a certain degree. If I were to say he is wrong because he looks like a garden gnome that would be an ad hominem attack.

You were attacking the messenger over the message. Rather than discrediting his arguments, you tried to discredit him because he was trying to advance his arguments in the political realm, where they have to take root or they are useless. The fact that he is politically active and trying to advance his economic theories is not a problem. The problem would be if his economic theories were wrong. That is what you should be addressing. Until you start doing that, I'm going to continue to not talk about your tangents.

And what exactly is that reality right now? And what exact policy do you think reflects what when? You used a whole bunch of economic terms and committed to nothing.

All I'm saying is economists who regularly clink stemware with politicians aren't the only economists, if you want a clearer picture of the situation you may need to widen your sources. I am committed to facts and logic, that's all.

Then present some already rather than attacking the individual.

http://money.cnn.com/2010/01/27/news/economy/Roubini_Davos/i ndex.htm

Alright, Roubini, predicted an eminent double dip in 2010. Everyone was worried about it because they listened to him and he turned out to be wrong. There were no bubbles ready to pop at that time. That said, even though he was misreading what was going on then, I totally agree that glass stegall needs to be re-implemented. I'm pretty sure Krugman agrees on that point too for what its worth. I'm all for better regulation of the financial institutions that continually cause these bad investments and subsequent crashes.

Apparently Krugman also believes politics should not play a role in economics and is particularly critical of conservative politics in economics but in doing so he provides a nice list of alternative viewpoints which are worth looking into purely because Krugman has expressed discontent with them.
http://krugman.blogs.nytimes.com/2009/01/19/economists-ideol ogy-and-stimulus/

Krugman believes politics are fine to play, as long as you are speaking from factually sound ground. All of those people he lists he debunks fairly well with evidence and data. That's the thing. Most of those conservatives, and I've read them (I started off my political life in the Fox News bubble) appeal to fear or some other emotion. They make it sound like your gut instinct and intuition is right. But what they don't do is pay any attention to the actual observable facts or logical arguments. That is my personal opinion from experience.

Is the debt possibly going to be a problem? Definitive. If we reduce demand its going to be a problem right now though, much sooner, and at a time when we can't actually deal with it since the revenue streams don't exist. And cutting government programs would only make it worse. Unfortunately conservatives, or tea partiers if you prefer, don't want to listen to that argument. They are simply in love with the idea of small government, which I could go on a rant about.

I read other sources. I look at their evidence. And compare their back and forth arguments, and Krugman is generally the most fact based among them. I'll agree that Roubini has points, but that 2010 double dip never happened, so... I think what's going on here is that if you predict the worst at every step of the process, when the worst happens you're going to be right the one time it looks like it mattered. Which is better than thinking everything is going to be perfect when its not, but that kind of thinking can lead you astray, even so.

For what its worth, I want the bank industry to be re-regulated. I want the EPA to have teeth. And I want massive government projects to improve education, transportation, and manufacturing in this country.

[gumOnShoe]

Also for what its worth, the Financial Times (a typically conservative outlet), is jumping behind Krugman on this saying that this particular argument isn't partisan at all.

Paywall, but you can register free to bypass & read.
http://www.ft.com/intl/cms/s/0/2e74ceba-afd2-11e1-a025-00144 feabdc0.html#axzz1xDtrlCgM

[bismuthfeldspar]

At 6/8/12 06:54 AM, gumOnShoe wrote: You rant about corruption when I asked the following:
Do we have excessive credit right now?

We cannot access the information and statistics needed to determine whether credit is excessive or not to a reasonable degree of accuracy due to corruption.

As simple google for "how can we determine the effect of the stimulus" reveals this.
http://www.nber.org/digest/mar11/w16479.html

Are people borrowing so much money right now and spending it willy nilly?
You latched on to the willy nilly and put it on the public sector when I was talking about all sectors. Stay on topic please. When you are ready to answer my original questions, please do so.
The problem would be if his economic theories were wrong. That is what you should be addressing. Until you start doing that, I'm going to continue to not talk about your tangents.

I thought the classy thing to do was not to split hairs over the ambiguity of the term "willy nilly".

Anyway, in the private sector market forces will take care of those who are spending willy nilly through creative destruction unless the government is keeping interest rates too low in which case some uneconomical businesses will survive during the boom era only to collapse when the bust arrives while responsible businesses that had adopted uneconomical practices in response to the excessive credit will also suffer. The public sector is different, it is part producer and part consumer and takes on different roles than the private sector which may require different demands, however it is not so different that the same principles that effect everything else don't apply to it. It is beneficial for growing businesses to take on debt with interest they can pay off with future growth and justified for young consumers to take on debt so they can afford a home or a car earlier in their life, so the level of debt depends on the economic benefits of investing in nationalized industries like roads, the proportion of young people in the country and the government services that are worth paying extra over the long term to have access to earlier.

If we take the debt/income of a prestigious corporation like Halliburton (4.82 billion/3.13 billion) and the average debt/income of a household (80000/50000) and average them out we get a very rough estimate of 157%, currently US government debt/income is (15.6 trillion/2.3 trillion) or 678%, government debt/gdp is a more common metric and is currently 69.4% according to the CIA fact book, this is different from the ratio between government debt and government tax receipts. If the US government were to double tax it would in theory reduce their debt/income ratio to 339% but this doesn't include the indirect effects on the economy of suddenly doubling taxation which would put many businesses in the red, so we can assume the 678% figure can't be changed drastically by increasing taxation despite the low gdp/debt ratio.

http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics
Looking through yahoo finance I can't find many businesses with comparable figures, so we can assume that the bulk of this debt can only be justified as a form of consumer spending across the board, by that I mean government services can serve both an economically productive and economically consumptive purpose, medical care for instance decreases work hours lost due to illness and benefits the rest of the economy but at a certain point increasing healthcare spending costs more than the benefits of decreasing lost work hours and so healthcare comes at the expense of the rest of the economy. At this point further medical spending is a form of consumption. The same applies to utilities, roads, law and order and emergency services. I can see why a 678% figure might be justified in the sense that the government handles the bulk of consumption that is justified by debt, I have been unable to find any studies to justify this though, just political rhetoric.

A more revealing figure would be the total debt owned by private businesses, private individuals and the government, I have been unable to find this though, only government debt. Perhaps we should e-mail Krugman with our concerns and request an explanation.

The problem would be if his economic theories were wrong. That is what you should be addressing. Until you start doing that, I'm going to continue to not talk about your tangents.

By proving Krugman is an ordinary human capable of being biased and fallible I prove that you should listen to other economists and expand your view on the subject, especially non-partisan economists who constantly challenge Krugman.

Alright, Roubini, predicted an eminent double dip in 2010.

http://www.reuters.com/article/2009/08/23/us-roubini-doubled ip-recession-idUSTRE57M29R20090823
It seems his predictions aren't far off.
http://www.tradingeconomics.com/united-states/gdp-growth

That is my personal opinion from experience.

My personal opinion from experience is that both parties use psychology. I gather it boils down to how people's emotions affect their reasoning processes, conservatives don't like uncertainty while liberals are too quick to tolerate it.

http://www.psychologytoday.com/articles/200612/the-ideologic al-animal

Is the debt possibly going to be a problem? Definitive. If we reduce demand its going to be a problem right now though, much sooner, and at a time when we can't actually deal with it since the revenue streams don't exist. And cutting government programs would only make it worse. Unfortunately conservatives, or tea partiers if you prefer, don't want to listen to that argument. They are simply in love with the idea of small government, which I could go on a rant about.

What are the exact figures and statistics behind this though? We have influential and popular economists like Krugman and their conservative equivalents. What is the scientific objective reality behind it all though? When we have the answer how do we bring this objective fact to the voters without oversimplifying it? Is this really what the partisan economists intend to do?

I read other sources. I look at their evidence. And compare their back and forth arguments, and Krugman is generally the most fact based among them. I'll agree that Roubini has points, but that 2010 double dip never happened, so... I think what's going on here is that if you predict the worst at every step of the process, when the worst happens you're going to be right the one time it looks like it mattered.
For what its worth, I want the bank industry to be re-regulated. I want the EPA to have teeth. And I want massive government projects to improve education, transportation, and manufacturing in this country.

What about this guy?

http://en.wikipedia.org/wiki/John_B._Taylor

[Camarohusky]

The problem with austerity measures right now is the timing.

Austerity measures should have been taken in the 1990s and between 2003-2008. That way when the inevitable downturns came the governments weren't in these big messes.

The whole question right now is a catch 22. Not doing austerity is going to force the governments into so much debt they may never be able to recover. Austerity right now will grind the already crippled and limping economies to a complete halt, killing the ability of the governments to gather revenue, thus making the debts even harder to cover and hurting the populace directly.

[SadisticMonkey]

So...america's in a depression, and in order to get out of it we need to repeat the actions taken last time there was a depression, even though these did nothing to end the depression and in fact probably prolonged it.

haha you can't make this shit up.

[morefngdbs]

At 6/5/12 05:41 PM, MOSFET wrote:

Where has all this money gone???

To the top.

;;;;
Its basicly been stolen.
QE 1 -was suppose to be used to get the economy going , to allow financial institutions the ability to have the capital availabel to lend money to businesses etc, instead of doing that they used it to prop up subsiduaries of themselves, to keep them viable, they invested it into other forms of paper, including Europena Country's Bonds & financial markets.

Billions has been lost in property mark down.
THat is where you have mortgages on hundreds/thousands of properties & homes WHich on paper mean you are owed millions/billions of dollars.
Tens of thousands of defaults happened with the housing bubble pop , that these properties values declined it varies across the country(I've seen reports of 35 to 56% ) like this Florida link
http://brevardpropertyappraiser.com/mainhtml/PropertyValuesD ecline_2008_2011.asp

So if you take a billion dollars of supposed value & it loses its ability to sell at those prices & instead sells at a much lower amount your $1,000,000,000 at a 35% loss means you can only show $650,000,000 in assets.

In many cases that's where a shit load of money went....it never actually existed in the first place, it was only an arbitrary figure on account balance sheets .

If you look at Europe's recent LIBOR scandal with the Barclay's bank....its only the tip of the iceburg, they are simply the first bank to cooperate with investigators ( & from what has come out of this, the rest won't be nearly as ready to cooperate)
But the USA has been deliberately doing everything in its power to keep their illegal antics out of the news & with Government support , its the only way they can keep it up, Regulatory agencies are hamstrung & quartered & not allowed to do their jobs. If the tale were actually known to all, the house of cards which is Wallstreet & your present system would explode into the dust which is all that's left as collateral ! !

IT is impossible for anyone to sell the entire global silver supply in one hour as anyone who follows the precious metal market (like I do) but JP Morgan did it this year, reguardless of the fact they don't own or control that silver & all they sold were useless pieces of paper backed like the American Federal Reserve Note by nothing but empty promises ! They accomplished their goal to drop the price of silver (the spot price) for a few days , but what didn't immediately follow , or even follow at all was the PHYSICAL price of silver didn't change no one would sell silver bullion for paper at that new spot price, only the traders of the various banks & funds were buying !
Check out this link actually read the whole thing .
http://www.24hgold.com/english/news-gold-silver-exposure-of-
banker-corruption.aspx?article=3972660454G10020&redirect=fal se&contributor=Jim+Willie+CB

If you have half a clue you should be able to understand what that means.
The scam perpetrated against not just the American People but the whole world makes what Maddoff did look like a bubble gum rip off where all the money Madoff stole equals a single stick (not package) of wriggley's spearmint gum.

While any of you who've read previous posts on financial matters here will see Carmohuskey come in & shoot it down with his self important "ITs Only An Opinion Piece & So IS With Out Merit "
Remember anyone you go to for any type of financial investment is almost always selling a product from a bank, brokerage house (owned by a bank) or investment fund (also usually owned by a bank) & he's selling you paper & he/she along with many others are making their money before you ever make a penny & they'll even take your money & leave you at a loss, so they can profit.... & I'm not trying to make anything from anyone.

I've been investing my hard earned money since I was a kid. I've been at it since 1982 & I've learned a couple of things, the crash at the end of 2007 started, I was out of every investment on paper by March of 2008 , I got out of everything except my CPP (controled by the Canadian Government & untouchable until age 60 with a 30% penalty for touching it before 65 I might add) & my Union pension which 50% is untouchable, the rest I've taken out. I even had over 10 grand in AIG & got out with a small profit. I sold everything I had that was in Ramey Investments & the Banks/investment Groups
I've bought property & gold & silver in physical amounts , I own a business & its inventory & property are 99% paid for & the rest will be paid off including my shop & the land its on this month. I've actually been buying precious metals since before 2006 as a security to have on hand.

The continuing bullshit which is Quatitive Easing is going on again in the UK 50 Billion this week & I read Japans printing presses are in high gear, China is signing more deals with many other countries to sell goods etc back & forth for each others currencies, Austrailia, Iran ( much to the piss of of the American's) as well as Brazil -as well as the other 'BRICS countries' Russia India & South Africa & , Zimbabwe , Argentina, Malaysia, South Korean, Belarus, Indonesia no longer bothering to switch to US Fed Reserve notes, you don't have to be a financial genius to see the writing on the wall. The Chinese have over a Trillion dollars in US Treasuries & an estimated 800 to a Trillion US fed reserve notes & they are spending the US dollars all over the World for commodities like Oil in Venesula, Platinum in Zimbabwe. They are building roads, municipal buildings ,schools, rail lines, ports in dozens of African Coutries to get access to the Natural resources of these countries...all paid for with US dollars.
They see the writing on the wall & realise a resource in the ground you own a piece of is worth more than a piece of American paper with a 'promise' to pay especially at the rate these promisary notes are being printed & how quickly inflation is eating up their value , even more so now that interest rates are at 0% levels ! ! ! !

Anyway pick away Carmo, & don't forget what US paper investment you believe we should be putting our money & faith in !
Because we all know My ideas are garbage, & my lack of debt makes me an idiot as opposed to all those millions of happy dromes drowning in debt especially those with underwater mortgages !