[cobran20]

I thought the interest component would be higher now though interest rates are much lower now than in 1987.

Click the link to view the article & graph.

[savagegoose]

wow you look at it like that , thwy aint doing such a bad job, defewnce down interest down and welfare up, what are people complaining about?

[wulfgar]

The world's nominal GDP is around 70 trillion.

The US GDP is around 15 trillion.

The US federal budget is 3.9 trillion, of which 2.3 trillion is obtained by revenue and 1.6 trillion from treasury sales.

The interest on the treasury debt isn't a problem for the US.

For example in the last 12 months the USD have devalued by 8.5%.

16 trillion x 0.085 = 1.360 trillion.

So the real value of the US debt has declined by almost as much as has been added over the year.

[boz]

wulfgar, on 19 May 2012 - 01:49 AM, said:

The world's nominal GDP is around 70 trillion.

The US GDP is around 15 trillion.

The US federal budget is 3.9 trillion, of which 2.3 trillion is obtained by revenue and 1.6 trillion from treasury sales.

The interest on the treasury debt isn't a problem for the US.

For example in the last 12 months the USD have devalued by 8.5%.

16 trillion x 0.085 = 1.360 trillion.

So the real value of the US debt has declined by almost as much as has been added over the year.

I am not sure you are right on this wulfie, notes might have devalued by 8.5% but goods and assets didn't, and more importantly wages didn't. I guess ultimately it depends what reality prevail: wages, prices, note printing..who knows?

[wulfgar]

boz, on 19 May 2012 - 02:00 AM, said:

I am not sure you are right on this wulfie, notes might have devalued by 8.5% but goods and assets didn't, and more importantly wages didn't. I guess ultimately it depends what reality prevail: wages, prices, note printing..who knows?

You should have noticed by now that I have a different theory of inflation.

Quote

Well the actual increase in USD in circulation has been 10% yoy.

Mar 16 2011 1,003,229 x Million USD in circulation.

May 16 2012 1,103,788 x Million USD in circulation.

However I take into account that the world gold stockpile increases about 1.5% p.a.

So Benny the Boy has devalued the USD against gold 8.5%.

A very hefty devaluation considering the USD pays hardly any interest.

Currently the currency per capita in the US is worth

There's a series of factors that determine a currencies valuation, such as demand on the international market.

But I'm concerned with the quantity of cash in circulation. Bernanake has weakened the USD over the past 12 months by diluting that in circulation with more dollars.

A great interest of mine is the quantity of cash per capita.

Mar 16 2011 1,003,229 x Million USD in circulation.......divided by population 309 million.

= 3,247 USD in circulation per capita a year ago.

Today it's different.

May 16 2012 1,103,788 x Million USD in circulation........divided by population 313 million.

= 3,526 USD in circulation per capita

We could compare this to Australia.

53,000 x Million AUD in circulation........divided by population 23 million.

= 2,304 AUD in circulation per capita


However even thought there is more USD per US capita, it is valued on the world market roughly equal because the US has much better terms of trade.


Britain for example has 1,000 pounds in circulation per capita.

We see that the quantity of cash per capita tells a lot about domestic value. In the case of the US its domestic spending becomes pace setter for the world.


A year ago US currency per capita bought 2.13 ounce. Today it buys 2.24 ounces.

Aus buys 1.44 ounces Britain buys an ounce.

This post has been edited by wulfgar: 19 May 2012 - 03:24 AM