Chart from big picture. John Mauldin writes:
Deficits are not necessarily a bad thing if kept in check and restraint is shown. But everyone cannot run deficits at the same time. If we don't buy $700 billion in goods, then that money cannot be recycled back to our debt. It is that simple.
The issue is that the US is not buying all the cheap manufactured crap from China, Japan and the other countries that fed their deficits back into the US Treasury bonds. Which raises the issue, all the money that is being borrowed to put all these countries in deficit; where is it coming from? From my simple understanding of economics, it only leaves domestic savings, increased taxation and inflation as the mechanism to pay for all the borrowing. Mauldin believes that all the borrowing in the US and Europe will leave the bond market 'seriously distorted'. It seems inflation is the inevitable outcome in such a case.
More Reading on Economics
Most Popular on South Sea Republic
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Most Popular Restaurants in Phoenix
Phoenix Eats Out is the restaurant review site for
Phoenix,
Scottsdale and
Old Town Scottsdale which lists the modernist and contemporary restaurants, taverns and bars in the greater Phoenix area.
This is the list of the most popular restaurants pages from phoenixeatsout.com that have been viewed the most;
My personal favourite restaurants in Phoenix are
AZ88,
Postinos,
Bomberos with
Grazie,
Humble Pie,
Orange Table,
The Vig,
Fez and others coming close behind. View the complete list with the photo-journalistic style images on
phoenixeatsout.com
Most Popular Hikes in Arizona
Arizona is an outdoor state and has lots of hiking in the city and around the state. Phoenix is unusual for most cities in having several large mountains in the center of the city with great hiking. Anyone who comes to Phoenix has to do the
Echo Canyon trail on Camelback and the
Summit Hike on Squaw Peak or Piesta Peak. The views of the city, suburbs and surrounding mountains are wonderful from Camelback and Piesta Peak.
For more experienced hikers there is the McDowell Mountains in North Scottsdale that has several difficult and strenuous hikes in
Tom's Thumb and
Bell Pass. Alternatively, you can hike the highest mountain in Arizona. At 12,600 feet
Humphrey's Peak is a long and difficult hike.
Alternate Australian Constitutions
Between 2004 and 2009 this site,
southsearepublic.org, was a constitutional blog based on scoop which focused on Australian and global constitutional issues.
One of the strongest aspects of it was the development of constitutions by those involved in the blog. These constitutions are the outcome:
The constitutions were built using principles from Montesquieu's separation of powers, the enlightnment's universal political rights and the ancient Athenian technology of sortition and choice by lot.
Archives For South Sea Republic
South Sea Republic started in 2004 as an Australian constitutional blog in 2004 based on scoop software. It was an immigrative outgrowth of Kuro5hin. The archives for each year since then;
The articles are ordered by views.
Who Is Cam Riley
I am an Australian living in the United States as a permanent resident.
I am a software developer by trade and mostly work in Java and jump between middleware and front end.
I originally worked in the New York area of the United States in telecommunications before moving to Washington DC and
working in a mix of telecommunications, energy and ITS. I started my own software company before heading out to
Arizona and working with Shutterfly. Since then I have joined a startup in the Phoenix area and am thoroughly enjoying myself.
I do a lot of photography which I post on this website, but also on flickr. I have a photo-journalistic website which lists
the modernist and contemporary restaurants in phoenix. I have a site on the
Australian Flying Corps [AFC] which has been around since the 1990s and which I unfortunately
lost the .org URL to during a life event; however, it is under the
www.australianflyingcorps.com URL now.
The AFC website has gone through several iterations since the 90s and the two most recent are
Australian Flying Corps Archives(2004-2002) and
Australian Flying Corps Archives(2002-1999) which are good places to start.
Websites Worth Reading
Websites of friends, colleagues and of interest;
- All the usual suspects are still buying US treasuries. See, for example, this article in today's FT.
- Private sector savings have soared. That's both an increase in household saving and a decrease in company borrowing
- When the world starts going pear-shaped, anybody with money invested in the developing world gets nervous and starts shifting it to the industrialised nations.
On the second question, there is another three-part answer:If your total debt is, say, 80% of your GDP, then a return to fiscal balance, 2% real GDP growth and 2% inflation will reduce it to 60% of GDP in seven years and 50% of GDP in 12 years. Sure, getting to fiscal balance will be difficult, but even that's not really all that important. So long as your annual fiscal deficit as a fraction of real GDP is less than real GDP growth + inflation, debt as a share of GDP will decline over time. So in the above example, an ongoing fiscal deficit of 3% of GDP will still see debt-to-GDP falling.