"F. George McDuffee" wrote:

On Wed, 09 Feb 2011 07:51:11 -0600, jim
"sjedgingN0Sp"@m@mwt,net wrote:

"F. George McDuffee" wrote:

=============
Its worse than you think. Below is an email I sent to my
Representative and Senators in Congress.

----- start of email -----
Yet another reason to vote NO on increasing the National
Debt Limit. Indeed, legislation to increase the debt limit
should not even be considered or allowed on the floor of
either house, where it just might pass.

Careful what you wish for..............

Americans have accumulated a massive amount of private debt
Private debt peaked at around 300% of GDP in 2008
That is much higher than the private debt peak in 1929
that led to 1930's depression
==========
Indeed, and it makes the debt situation that much worse.





Look at what debt deflation did in the 1930's

http://cdn.debtdeflation.com/blogs/w...everagin15.png




If the government stops acquiring debt
the economy will go through massive deflation
The private sector is already delevaraging
if the government joins the party there will be massive deflation

The total debt has been shrinking for 2 years
If the government lets it deflate in free fall
your property, house, pension, stocks
all become worth much much less

Not like the 1930's but much worse than the 1930's because
there is a lot more private debt in 2008 than there was in 1929