Lacy Hunt: The World Economy's Terminal Case of Debt Sclerosis

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1. Listened to this interview months ago.........and stumbled onto it again this evening.  Excellent guest.  Original interview was in August, 2014.........Would be GREAT to have him back 5-6 months later for an "Update".  
2. VALUE, COME FORTH!
3. I suspect Lacy's money velocity figure is itself a derived figure. I wonder whether the denominator in Lacy's formula has already been used to derive the numerator.
4. Spending money from the future to barely substation our purchasing power
5. In 20 years I would expect the dollar to be worth zero. Why would you lock up money for 20 years with a promise of a proven liar government for a sub inflation return. I think you can at most by a can of Coke for your bond in 20 years.
6. Excerpt: "Fisher modified (Bohm-Bawerk) a bit and he said that it ultimately depends on whether the debt is productive or not. If the debt generates an income stream to repay principal interest, then you’re OK"
   
   Fisher was only correct under the specie monetary scheme. In the banknote scheme, where currency itself accrues interest as long as it remains 'current' (since when do banks destroy banknotes once used to 'pay debts'?), then no actual extinguishment of debt ever occurs. The 'float' of the damned things goes on, forever compounding increasingly greater interest 'service'.
   
   Also, the very term 'Economic Policy' is a delusional notion. We were supposed to transend the stupidity of Mercantilism when we graduated to Capitalism. A 'Free Market' is not directed by governments with roiling oceans of their proprietary banknote credit-'money'.
   
   Lastly, Keynesian 'Insufficiency of Aggregate Demand', leading to government 'Policy' against savings, was mumbo-jumbo to whitewash the fact that government-fixed-value banknotes prevented lowering of prices to clear markets on existing demand. If currency inflation didn't artificially levitate goods prices, then the 'Great Depression' would have been a wholly forgettable non-event.
7. Economists have not figured out what debt is and how it affects economies - so of what use is this group? Credit is debt - not money. Easy credit leads to poor decisions; debt incurred that will not generate income to repay principal and interest - or asset appreciation so one can cash-out, pay off debt and walk away cash positive. As assets need maintenance and security, at the same time being subject to obsolescence, the global economy had more debt and future liabilities, than assets. Paper/digital/virtual valuations that can not all be realized at once. Paying debt with debt maintains illusory values, upon which we all depend. Consider reading David Graeber's "Debt: The First 5,000 Years"  Unwinding to a reality based economy, where debt is understood, means that "efficiency is the new growth." The new alchemy will be getting blood from turnips. 
8. Great informative video.  Can you post links to where Dr Hunt got his debt to GDP figures for the various countries?  It would be greatly appreciated and it will help me spread the word about the nature and gravity of the situation we face as the figures he cited clearly put the "developed" world well beyond the IMF's stated threshold from which an economy can recover without major deleveraging.  Thank you for all your work on these topics!
9. The dollar is borrowed into existence. We borrow every dollar into existence from the FED. The dollar is their product. They make money from us borrowing their product from them (the dollar.) The FED is a private bank. We only borrow the principal, we do not borrow the interest. Where do the dollars come from to pay the interest? We have to borrow the money from the FED into existence to pay the interest. Money comes from debt, it is created through debt. We only create money through principal borrowing, we have to borrow more to cover the interest. THIS is why we always have to go further in debt. If we pay down the debt to the FED it destroys the dollars we use to pay off the debt and it will reduce the money supply. We HAVE to always go further in debt to cover the interest on dollars created out of thin air to a private bank. Even Lacy does not seem to understand this. 
10. I always look forward to hearing what Lacy has to say.  Hope he comes back.  Thanks.
11. Chris, what was the title of the quarterly report you mentioned, I couldn't quite make out the name? Thanks
12. The thing about debt, is that it's only bad if you reject the existing political system.
    
    Because, as you've noted yourself Chris, the entire financial system (and the political system dependent upon it) would cease to function without the continuous expansion of debt. 
13. approx at the 30 min mark....  the post world war 2 boom........etc... was "rectified" ....no mention of bretton woods.....  
    
    why is it so hard to find a macro economist that understands currencies?
14. Gold still trending DOWN!
15. War's coming!
16. I think he's missing it a bit by predicting slow downward grind in economic growth. Peak oil is very real and will continue to hit our economy like a hammer.
17. I saw Lacy on CNBC a few years ago... he was another one of those "all is well, buy buy buy" CNBC guests.  Sounded much different than he does here.