THE PARTY'S OVER, WE'VE POPPED THOSE PRETTY BALLOONS...

As the economy collapses around us and you wonder why it's happening, read and remember this post from Market Ticker. This is the most clear and concise explanation I've seen of why all of the money that the government can print will never put the house back together. Until we remove all of the excess and bad debt from our system we cannot start to recover. The government is trying to return things to the way they were: borrow our way to wealth, create demand for goods we don't need and in a sane world would never buy. Use this demand to create jobs that shouldn't exist and can't continue without more governmental manipulation of the cost of money. This is not possible. That game is played out. We don't have any more money, our assets are losing value and we, the consumers, upon whom 70%of GDP relies, will never, ever allow ourselves to be caught in this trap again. Even if we want to borrow the banks won't lend. Our needs have been more than satisfied at the material level. Demand can no longer be pulled forward. We will buy only what we absolutely need to live, not what we want. We're done eating caviar; we are now on the catfish diet. The new sign of wealth is a garage full of food, not Ferrari's.