But the stuff delivered for the paper was and is consumed. The oil is burned, the cars are wreckage and the willingnes and ability to work and produce something in return has vanished. The banks who issued and still issue in an accelerated way the huge piles of paper are of course in a state of denial. As well as those sitting on this ever growing pile of paper supposed to be proof of an investment. Those who deliverd real work for a pile of paper will find themselfs betrayed, those few who used this setup to grep the fortunes are the "heroes" of this game. And the banks will decide, when it is time to let the stupid fiction of I=S go down the tubes.
“Consider Kevin Phillips’ book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, where he identifies the Seven Sharks of the American economy:
1. The US economy has become overly dependent on the finance industry as opposed to being better balanced with a manufacturing base, as America had up to the mid to late 1960′s.
2. American home prices are a collapsing crisis.
3. For decades Americans have been building up both national and personal debt beyond any prudent measure. Americans have a poor negative average savings rate. Too many Americans feel it is their God-given right to buy an excess of goods at cheap prices, thanks to cheap overseas manufacturing. The US national trade deficit is, and has been, running at about $700 billion a year.
4. Global commodity pricing build-ups have skyrocketed.
5. US Government statistics have proven to often be flawed and deceptive so that many Americans have been led down the garden path with unrealistic assurances from SEC, the Fed and the US Treasury Department.
6. Globally, we have peak oil prices that go beyond commodity inflation, suggesting a serious shortage of oil compared to growing demand. While there has been the relative recent price drop, cheering for slightly less than $100 a barrel levels is nothing to be sanguine about.
7. The collapsing dollar may eventually give pause to some of America’s major overseas lenders when considering further extending to the US an open line of credit that Americans have come to take for granted. Cheap American exports may sound positive to some Americans, but that may be true only if America still has an adequate and competitive manufacturing base large enough to take sufficient advantage
Now, if one or a few of the above factors coincided, the overall situation could be rationalized away as being problematic and not be cause for serious alarm. But, of course, all seven are present and some have been with America for a good part of the past decade."
Michael Hudson: “Debts that Can’t be Paid, Won’t Be”
Larry Summers und Paul Krugman: Secular Stagnation = QE for ever