PONZINOMICS WILL ULTIMATELY FAIL

REPOST OF DOUG NOLAND'S CREDIT BUBBLE REPORT.
Here is LINK to FROM BEAR TO BEAR

2 paragraphs from this inciteful report, and I URGE you to read his complete summary always found towards the bottom of stats many cannot stomach. IMHO Mr Noland has the most eloquant prose and most intelligent and level headed opinions on what has happened and what is likely to be the outcome given current tactics being used. The importance of which I have now just re-read it myself rings to me loud as the Phila Bell.

"And if the nuances of the past twenty years (or more) argue against extrapolation, I contend that the emergence of the Government Finance Bubble argue only further complicates drawing historical inferences. First of all, massive monetary and fiscal stimulus has supported system-wide incomes, spending, and corporate revenues. Policies also incited an unwind of bearish positions and a rather robust, albeit speculative, stock market rebound. Thus far, zero rates and Trillion dollar deficits has created the illusion of normalcy – when it comes to both the markets and real economy. This creates an “analytical” hook that will snare many.

In contrast to previous mortgage-Credit dominated reflations, the evolving global reflation will prove unique for its lack of self-reinforcing dynamics here at home. Before, a Trillion of net additional mortgage Credit would reliably inflate home prices and induce more borrowing, consumption and investment - all of which worked to bolster self-reinforcing confidence in the underlying Credit apparatus and the overall soundness of the general boom-time economy. Today, faith in this private-sector Credit machine is broken, while housing Bubble/consumption psychology is badly shattered......."