> 1. The Latin American debt crisis of $120 billion, if
> that number is correct, is trivial.
Not if your currency collapses on you, in which case that $120 billion can zoom to the equivalent of $240 billion or more overnight -- as Thailand, Malaysia, Indonesia, and South Korea have discovered to their horror and dismay.
> 5. Even outstanding consumer debt in the US isn't as
> high as some apocalypse theorists would have it. There
> is a high percentage of so-called "convenience
> charging", people that pay in full each month but in
> doing so have high outstanding balances. I know,
> because I started to do it, and have gone from 0
> outstanding debt to an average of $800 to $1500 per
> month, and occasionally two or three times that.
But those debts get extinguished just as quickly, and are erased from the total debt stock; all you're really doing is turning one flow of payments -- for most of us, this means the checks we write on our checking account -- into another, is all. So you write one check to your credit card each month instead of a whole bunch of checks. But the total stock of consumer debt has indeed risen sharply throughout the Bubble, and credit card debt has exploded; thanks to declining real wages and those 18% interest rates, personal bankruptcies have climbed to all-time highs.
> 6. As for the US trade deficit, we have to consider
> that looking at a trade deficit through the eyes of a
> gold standard horror of same is really not relevant.
> The US in addition to whatever imbalance there may (or
> may not) be in goods versus services, etc., the fact is
> that there is a whole world economy, both legal and
> illegal, which functions on the US unit of currency.
It's not just a trade deficit, it's also a capital account deficit. We are literally going $150-200 billion into debt each year to Japanese/European creditors. The launch of the euro is the Eurobourgeoisie's attempt to lock in the repayment of that debt in a currency of their own choosing, rather than the currency of their competitor and former master.
-- Dennis