SOS New Discovery of USA statistics

The manifestation of a deleveraging economy is as follows:-

1. Debt destruction
2. Bankruptcy
3. banking credit contraction

Fed total assets
2007/8 is USD0.4 trillion
2010 is USD2.4 trillion (after buying up few trillions of toxic IOUs)

USA debt to GDP
1930 to 1970 = 170% of GDP
1975 to 2010 = 380% of GDP (expansion of debt)


World market debt is about USD52 trillion
World GDP is about USD60 trillion (equivalent to "world revenue")
World derivatives not disclosed in the bank's book about USD600-800 trillion.

MyView

Based on the said statistics, it is like, a company (world) revenue is about USD60 trillion, with a debt on sales of USD52 trillion or 86% of total sale of the company. On top of that, the company has about USD600 trillion worth of derivatives (i.e. 10 times of its total sales not disclosed in the books)

What will happen to a company with a debt of USD52 trillion over a sale of USD60 trillion, it means a lot of sale are debt created, not collected yet or unable to recover. If we do a debtor turnover it is about 316 days, which indicates an unhealthy debtors turnover, i.e. may be lots of debts not collectable.

As for derivatives, it is mainly created by the financial institutions like CDOs, CDS, MDS, CLOs, Forex, which does not actually contributes to the real economy of product and services, it is a product of its own for the financial systems (Ponzi Scheme) or better know as weapons of mass destruction.

Hence, we can expect 2 implosions, one the USD52 trillion market debt and two, the derivatives.

The long term consequences that is clear is the deleveraging (like Japan), clearing all the toxic "loans" or "debts" which will take many years. (Japan took 20 yrs and still on going). The property and stocks in Japan deflated substantially from 70 to 90% todate.

The question now is what will happen to USA, which has similar characteristics of over gearing (creating property bubble)? Is it an isolated case, no impact to the world? Think again.