Niall Ferguson Video Lecture - "Empires On The Verge Of Chaos"

ForaTV, in conjunction with the Australian Broadcasting Corporation, shares another terrific must watch presentation, this time by one of our favorite socioeconomic historians, Niall Ferguson, who in this lecture talks in depth, and with an objective perspective that only few can share, about empires on the verge of decline, emphasizing the precarious position the US has found itself in, now that China's ascendancy is undisputed, and only matched by the accelerating descent of the once great US nation. The fact that Ferguson is Paul Krugman's natural nemesis in all things only makes his insights all that more relevant (not to mention correct). And while the various chapters discuss such key concepts as the limits and implications of complexity theory, the ever increasing portion of US federal revenues attributed to interest payments (surpassing defense spending), China's military sustainability, the limits of Keynesian stimulus, investing in gold and hyperinflationary concerns, the primary highlight is Ferguson's discussion on what may be the primary topic of 2011: whether ot not debt will trigger the collapse of the US. To wit: "Sometime over the next decade the US will reach the crossover point at which it will be spending more on debt service, than it is able to spend on defense...

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I read several Ferguson books and enjoyed them. He is a sort of McWilliams in the sense that he's probably right on many things, but too far out on the real detail and timing to really rely on his analysis for anything useful (like buying or selling or emigrating). He's also like McWilliams in that he would do absolutely anything legal to promote himself or sell a book.

His big weakness is that he can't wait for the US to collapse like the British Empire did. His impatience for this event poisons a lot of otherwise useful observations.

I find Ferguson's work astonishingly biased tripe.
His insistence that the USA should treat UK as some sort of wiser older brother is insufferably tendentious.
He's a step up from Andrew Roberts. But only just.

I read several Ferguson books and enjoyed them. He is a sort of McWilliams in the sense that he's probably right on many things, but too far out on the real detail and timing to really rely on his analysis for anything useful (like buying or selling or emigrating). He's also like McWilliams in that he would do absolutely anything legal to promote himself or sell a book.

His big weakness is that he can't wait for the US to collapse like the British Empire did. His impatience for this event poisons a lot of otherwise useful observations.

US Closes 2010 With $14,025,215,218,708 And 52 Cents In Debt, A $154 Billion Increase Overnight

When we predicted a few weeks ago that the US would end 2010 with $13.8 trillion in debt we miscalculated the settlement dates on all the last round of bond auctions . As a result, we are happy to announce that as of December 31, 2010, the US now has $14,025,215,218,708 and 52 cents in debt (incidentally this is an increase of $154 billion in debt on the US balance sheet overnight). As a reminder the debt ceiling is 14,294,000,000,000. Which means at a run rate of $125 billion in net monthly issuance, the US may not even get to the end of March at the current burn rate. Which also means Congress better start the discussion on raising the debt ceiling as soon as February. Which means someone is about to [win/lose] some serious cash on the Feb 28 debt ceiling hike InTrade contracts.



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What do they mean by trade ceiling in that context? Am I right to infer that there are statutory limits on the amount that the US can borrow? Is it the point at which US debt:gdp exceeds 100%?

Congress votes on the debt limit ceiling that the government is allowed to borrow up to. I think that is what is referred to?

More Bad News For States: State Revenue Plunges By 31% In 2009 To $1.1 Trillion As Spending Increases

The Meredith Whitney "ubiquitous state default" case may have just gotten another leg up. According to just released Census Bureau data, in 2009 total state revenue plunged by 31%, from $1.6 trillion to $1.1 trillion. "The large decrease in total revenue was mainly caused by the substantial decrease in social insurance trust revenue. Social insurance trust revenue is made up of four categories — public employee retirement, unemployment compensation, workers compensation and other insurance trusts (i.e., Social Security, Medicare, veteran's life insurance)." But the drop in the top line did not stop states from spending more: in the same year, state government spending rose by 3%, while that pervasive source of backstop funding, the US government, saw its grants to states increase by 13% to $477.7 billion. At this point it is safe to say nobody believes there is a deficit that the US government can not fill.

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Following Gibbs, Volcker To Depart Titanic Next

Poor President Obama may be left without a single non-Wall Street based advisor in no time. After his trusty sidekick Robert Gibbs announced earlier he is bailing from the Titanic, Reuters has just reported that Paul Volcker, the only man in the past 30 years to have to deal with the problem of pernicious inflation, is about to take a hike too. While his role was simple: head of the White House advisory panel, he did at least attempt to do some things while there, namely take down prop trading. Of course, he failed, as all prop traders are now merely masked as flow traders, and even worse, are sitting smack in the middle of order flow, knowing full well who is buying what, and allowed to build or reduce securities inventories at will with full inside knowledge. But at least he tried.

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Ron Paul: "The U.S. Government Must Admit It Is Bankrupt"

Any time you bring the two Pauls together in an interview, and start discussing items such as the debt ceiling, government spending, and monetary policy you know the results will be good. Sure enough, in this rare ABC interview with father and son, the sparks fly, and among the topic touched is the most popular story on Zero Hedge from yesterday, namely President Obama fabulous hypocrisy, who after bashing the debt ceiling as a senator 4 years ago, has bet the outcome of his entire economic policy on maxing out every single credit card available to him. Paul's response: "we have to face the fact that we are bankrupt and we can't pay our bills." Not exactly the kind of thing one wants to hear if one's name is Hu Jintao. That said you know the Paul-led interrogation of Bernanke will be something else, even if it is ultimately totally fruitless.



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The US is drifting from a financial crisis to a deeper and more insidious social crisis. Self-congratulation by the US authorities that they have this time avoided a repeat of the 1930s is premature.

More subtly, Asia’s mercantilist powers have flooded the world with excess capacity, holding down their currencies to lock in trade surpluses. The effect is to create a black hole in the global system.

Yes, we can still hope that this is a passing phase until rising wages in Asia restore balance to East and West, but what it if it proves to be permanent, a structural incompatibility of the Confucian model with our own Ricardian trade doctrine?

There is no easy solution to creeping depression in America and swathes of the Old World. A Keynesian `New Deal’ of borrowing on the bond markets to build roads, bridges, solar farms, or nuclear power stations to soak up the army of unemployed is not a credible option in our new age of sovereign debt jitters. The fiscal card is played out.

So we limp on, with very large numbers of people in the West trapped on the wrong side of globalization, and nobody doing much about it. Would Franklin Roosevelt have tolerated such a lamentable state of affairs, or would he have ripped up and reshaped the global system until it answered the needs of his citizens?

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Good article from AEP today.

That's not an article. It's a few partial indicators patchworked together with some reference to AEP's own outdated experiences and a couple of lines of opinion piece at the end.

Tripe as ever from AEP.

This whole thread is ridiculous and more suited to the Piston in any case.