Capitol Solutions

Dennis R Redmond dredmond at SPAMOREGON.UOREGON.EDU
Sun Nov 14 19:32:54 MST 1999



On Sun, 14 Nov 1999, Doyle Saylor wrote:

> Dennis could you explicitly reference where you get this sense of an
> estimate of credit figures from?  Last year on LBO I quoted from memory a
> figure of $60 trillion which I thought I saw in the business press
> representing the derivative market size.  There was some response of
> disbelief then someone totalled up the three year unwinding of derivatives
> to about 50 plus trillion which is considerably larger than GDP for the
> whole world.

The $70 trillion I suggested is the entire global credit superstructure --
bonds, loans, stocks, you name it. The central banks are the ones who
actually collect these stats; the Federal Reserve website, for example,
over at http://www.bog.frb.fed.us/releases/Z1/ has pretty thorough
listings here. Right now, US GDP clocks in at $8.5 trillion, while our
credit system weighs in at $27 trillion. In general, First World countries
have credit superstructures at least three times as large as their real
economies; given global GDP of around $22-25 trillion, $70 billion is not
unreasonable. These numbers are important, because in an age of deficit
hysteria, the best argument against budget-cutting is to show that the
bourgeoisie do not practice the austerity they constantly preach to
others.

-- Dennis











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