The choice is now between the present unevenly distributed long...

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23skidoo

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29/08/14

14:37

Post #: 13895002
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Originally posted by sergeant ↑

Global debt levels are higher than they were in 2008. FACT. Any deterioration in asset values from here will only make the problem worse. The question is, what will CB's resort to in order to avoid this eventuality?

Some argue that we are already in a debt/deflation cycle, and the only way to solve the problem is money printing or debt forgiveness, aka a debt jubilee. Any threat of the latter would be disastrous for borrowers in the first instance, as banks try and retrieve debts, and politically, would be totally unpalatable.

Alternatively, there is a strong argument for innovation providing the required growth to repay debt, but frankly, I think that has attached issues in that most innovation seems to centre on the reduction of required labour to run a business, and therefore leaves the ever bulging problem of welfare costs, from unemployment. Ultimately, that leads to lower population growth, which in turn, leads to lower consumption and a further slowdown in GDP.

What to do? These are interesting times we live in, but in the past, the usual course of action has been conflict, with asset theft being the primary reason. This also serves the duel purposes of driving depopulation through a higher than normal mortality rate, and higher consumption through increased defense spending.

Apologies for the rather downbeat analysis, but can't see any alternatives right now. Happy to hear thoughts.

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The choice is now between the present unevenly distributed long term pain, which Europe and the US in particular have, and more acute, but shorter term pain, in which the present system collapses and everyone takes a massive haircut, but a new fairer world monetary and banking system is negotiated, and the world embarks on a new period of sustained growth, fuelled by investment in real wealth-creating investment, not the present gambling which is only designed to transfer wealth to the banking and finance elite.
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0 Great analysis

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