The mantra of the Global Debt Ponzi operators: Grow or Die.

For at least the last 6-7 years, we've heard increasing government chatter about "growth" both here in the US and abroad.  In fact, "confidence" and "growth" seem to be part of every economic speech these days.  This should be a warning sign but after people hear it enough times they start to parrot it as economic fact.  In truth, if you have some percentage of "growth" every year, that is an exponential function.  It has been proven time and again that exponents and true economic are incompatible.  And real economies do not need pleas for confidence.  The confidence is built in and inextricable from an honest economy.  Only the Debt Ponzi economy needs additional confidence in order to survive a while longer and only con men are calling for confidence.

In fact, the only valid reason for the requirement of growth is population growth.  But evidence shows that the growth rate of the population is declining.  It's as if the human herd somehow senses, like many kinds of herds do, that the carrying capacity of the planet is near and so birth rates slow down.  So if this is the case, why do we require continuous "growth" of the economy?  The answer is pretty simple if you understand the truth of what is going on.  The growth has not been real growth.  It has been artificial, debt-fueled growth.  The world is now reaching the limit of the debt that it either wants to or can afford to take on.  Thus, debt fueled growth is waning. 

The Global Debt Ponzi has entered the collapse stage.  It could take years or it could take decades to play out.  There is no easy way to tell because it's all about confidence of the people.  If the people are stupid and easily manipulated then the unwinding process could take decades as it has done in Japan.  This is why government propaganda keeps preaching confidence.  But I do not think we have decades left.  I think that the economic termites have eaten all the structural wood out from under us.  They stopped right at the paint as termites usually do.  The structure looks OK still but a stiff wind will blow it over.

There are too many stiff winds in the economic weather forecast to allow this Ponzi collapse to take more than 5 years more to play out IMO.  Japan has now committed itself to a debt death spiral by targeting 2% inflation which, if they achieve that level, will make their interest rates rise past the gpoint that all tax collections can possibly service the debt.  And that's with doing nothing else with the money but pay the interest.  When Japan goes down it will be a massive domino collapse.  To reference Warren Buffet, we will see that the entire world is skinny dipping economically as the global tide recedes.

Euroland is also steadily sliding off the cliff.  Spain's debt is increasing at a dramatic rate despite lack of visible panic in the markets.  The panic will return.  For sure.  There is way too much collective calm given the collapsing global fundamentals.  Anything that looks good only appears that way because the Federal Reserve is pumping $80 bn into the economy every month.  It is a Grand Illusion.