Time to pay the piper

Here's a graph that plots US household debt as a percentage of GDP over the last fifty years or so (from Contrary Investor, via Fabius Maximus). Note the sharp rise starting at about 2000, just as the tech boom/bust was tailing off. Now, take a look at what happened to mortgage interest rates at that same time--they fell off a cliff. As the Fabius article points out, "[o]ver the past decade, deficit spending by consumers has supported the United States economy." It's easy to see why the idea of a credit crunch puts so many on Wall Street and in DC in a cold sweat.

Meanwhile, China has enough cash to allow its taikonauts to perform their first space walk, and are working to field an aircraft carrier soon, with technology provided by Russia. Russia is also making pretty good money selling arms to Venezuela, and tightening its grip on energy resources:

"During Friday's meetings, Putin also said that Russia was ready to cooperate with Venezuela on nuclear energy. Their ministries signed a memorandum of understanding that sets out plans for an energy consortium. The deal would give Russian companies greater access to fields in Venezuela, which would reap billions of dollars in Russian investments."

Back here at home, "Flip This House" decides to soldier on.