http://blog.mpettis.com/2014/03/will-emerging-markets-come-back/#comment-22383

Quote from: AnonyMint

Quote

This simple step will eliminate systematic labor arbitrage across the world and reveal true competitive advantages arising from know-how and expertise instead of competitive advantage arising from undervalued currency / labor cost given labor productivity.

This assumes that labor (or exchange rate) arbitrage is the root of the problem. The problem is the lack of annealed fitness created by debt. Period. This is why debt can't be written down painlessly because there are social capital costs to large debt that can't be unwound quickly.

And labor is going away, even Oxford University predicts 47% of all existing jobs will be replaced by automation.

What all that debt did since the 1980s was allow people to sustain in jobs which had already become irrelevant because nerds like me were fooling around with this new toy called the personal computer since 1978. And while we changed the world by being a million times more productive, no one noticed because they didn't need to because debt was there to hold their labor hand. So now they will pay for it with an abrupt collapse into technological unemployment, probably at 50% of the global population unemployable (uneconomic in their knowledge versus a computer or robot).

So while those globalists will get together to fantasize about non-solutions, it is going to be up to us technologists to devise a way to keep us from spiraling into a Dark Age. And we will. Because we can.

You fail to understand that you can't just wipe the debt ledger clean, then everything continues as if there wasn't debt.

Not only is there the problem of leverage meaning some people expect more than can ever be produced to pay them, i.e. a unit of money is a claim on production.

There is also the problem that the population has become lulled into technological irrelevance by the debt which sustained their desire to remain technologically ignorant.

Quote from: MoonShadow on March 11, 2014, 06:18:47 PM

Quote from: AnonyMint on March 11, 2014, 12:32:11 PM

F8ck the coming apocalypse is worse than I previously estimated...

Quote from: AnonyMint on March 11, 2014, 12:29:23 PM

Quote from: alexeft on March 10, 2014, 11:23:29 PM

Soooooooooo, I read today that the world's debt amount to $100 trillion.
Wikipedia says that in 2012, the GDP was ~72 trillion. Let's suppose that it's $80 trillion now.

Debt to GDP = 125%

Incorrect. Total debt is $157 trillion in developed countries plus $66 trillion in emerging markets, because is 313% of GDP and the GDP is $72 trillion:

http://www.gfmag.com/tools/global-database/economic-data/11855-total-debt-to-gdp.html#axzz2iu5C4Y4Z

http://blogs.wsj.com/economics/2013/05/11/number-of-the-week-total-world-debt-load-at-313-of-gdp/

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://bitcointalk.org/index.php?topic=365141.msg4337574#msg4337574

Don't forget to add on $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

http://www.indexq.org/economy/gdp.php

While that is likely a fairly accurate statistic, it's still very misleading...

...The hotel proprietor takes the 100 dollar bill and runs to pay his debt to the butcher. The Butcher takes the 100 dollar bill and runs to pay his debt to the pig raiser. The pig raiser takes the 100 dollar bill and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs to pay his debt to the towns prostitute that, in these hard times, gave her services on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there...

...No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.

Most of these derivitives are just like the debt that this small town had, interlinking trade debt that largely self cancels...

And this exemplifies you are a mainstream (Keynesian Krugman-esque) economist and they are incorrect.

You fail to understand that you can't just wipe the debt ledger clean, then everything continues as if there wasn't debt.

Not only is there the problem of leverage meaning some people expect more than can ever be produced to pay them, i.e. a unit of money is a claim on production.

There is also the problem that the population has become lulled into technological irrelevance by the debt which sustained their desire to remain technologically ignorant.

What you fail to understand is that along the way of creating $227 trillion of global debt, the people were incentivized to attain skills and life experience that makes them entirely unemployable in the robotics and computer automation age.

I already explained this twice upthread, but you seem to have selective comprehension, i.e. you ignore (and fail to refute) my logical points when they challenge your basis.

https://bitcointalk.org/index.php?topic=455141.msg5637503#msg5637503

Quote from: AnonyMint on March 11, 2014, 09:28:37 AM

About the imminent conflagrapocalpyse...

As I explained in an upthread post (which I am too rushed to go find the link to at the moment), the ledger of who owes whom is less important consideration than the fact that it represents $~~150~~227 trillion of human capital that was misdirected in its activities since mid-1980s and especially since 1994 or so...

So this is why technological employment is going to be so severe and massive overcapacity in manufacturing, fixed capital infrastructure, and conspicuous consumption, because all during the 1970s, 80s, 90s, and 2000s, while a few of us hackers were becoming 100000X more productive with our new found toy (the personal computer), the bulk of the population was able to stay in the old industrial economy thanks to increasing debt.

So what you are going to see when the $~~150~~227 trillion debt bomb explodes 2016ish is that anyone who is not very technically relevant in the new Knowledge Economy will find themselves unemployable. The governments will try to appease this majority by taxation and confiscating everything, because they fundamentally don't understand the cause of the problem.

Quote from: DoubleSwapper on March 10, 2014, 01:23:50 AM

With both scenarios (further concentration of wealth/obliteration of wealth) I see several problems that make this scenario seem unlikely.

Those ledger IOUs are worthless to both lender and borrower. The capital now is all in the brains of hackers such as myself. We take over now. Checkmate. While we were busy sleeping under our desks for the past 3 decades, the rest of you were out enjoying yourself. Now the payback comes. Oxford U. admits 47% of the existing jobs will be replaced with robots over next 19 years (was 20 last year when study was published)...

...I've been screaming this in the Mad Max thread in the Politics forum. Check it out for more details. See also the Economic Devastation thread in the Economics forum.

https://bitcointalk.org/index.php?topic=455141.msg5097815#msg5097815

Quote from: AnonyMint on February 12, 2014, 11:17:05 AM

But first, we go to a strong dollar and massive global deflation. The USA and the NSA will thus be in the driver's seat of the default of $~~150~~227 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $~~150~~227 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now. There is no way to avoid the global deflation contagion.