How Big Of A Deleveraging Are We Talking About?

https://realinvestmentadvice.com/how-big-of-a-deleveraging-are-we-talking-about/

“If the economy is doing as well as Central Banks suggest, then why, after 9-years, are the ’emergency measures’ being applied to global economies still in place?” 

More importantly, what happens when they are forced to stop.
Of course, this is why Central Banks globally are terrified of such an outcome.

Has Derivatives Deleveraging Fueled the Stock Rally?

http://www.oftwominds.com/blogfeb12/deleveraging-rally02-12.html

The deleveraging deception

http://www.realclearmarkets.com/articles/2010/09/23/the_deleveraging_deception_98682.html

Dr. Keynes killed the patient

http://www.realclearmarkets.com/articles/2010/08/20/dr_keynes_killed_the_patient_98632.html

American consumers are trying their best to deleverage. In terms of the story, the patient is actually trying to lose weight. But the government is blocking deleveraging and trying to boost consumption. They are forcing food down the patient's throat. According to the Flow of Funds Report, households reduced debt at a 2.4% annualized rate ($330 billion) during Q1 of 2010. Meanwhile, the federal government was piling on debt at an 18.5% annual rate ($1.44 trillion). Since every dollar of government debt is a promise to tax the private sector in the future with interest, this public spending spree effectively negated the Herculean efforts of the private sector to return to a sustainable path.

That's where the arrogance of Washington is really apparent. Scores of millions of American consumers have made the decision that reducing their debt burden is in their best interests right now. But a few hundred individuals in government believe they know better than the collective wisdom of the entire free market. By leveraging up the public sector, they have used their power to confiscate our savings. In short, they are forbidding us from following the common sense path to fiscal health.

Bill Gross compares deficit spending to flushing money down the toilet

http://sfgate.bloomberg.com/SFChronicle/Story?docId=1376-L69P2S6NKMZJ01-1M2S7D340JHALJ6F809MPJREDH

Pacific Investment Management Co.’s Bill Gross said deficit spending by governments that seek to maintain artificial levels of consumption “can be compared to flushing money down an economic toilet.”

Without acceleration in population growth, developed countries finance more consumption to maintain economic growth, the world’s biggest bond-fund manager wrote in his August commentary today on Newport Beach, California-based Pimco’s website. Leveraged spending, he said, is not a substitute for demand created by people.

“I will go so far as to say that not only growth but capitalism itself may be in part dependent on a growing population,” Gross wrote. “Production depends upon people, not only in the actual process, but because of the final demand that justifies its existence.”

Deficit spending will be unsuccessful in what Pimco calls the “new normal” because deleveraging, re-regulation and de- globalization produces structural headwinds that lead to slower growth and lower-than-average investment returns, Gross said.

Pimco, a unit of Munich-based insurer Allianz SE, managed $1.07 trillion of assets as of March 31.