warning!!! ......gfc2 could be upon us, page-26

You are right YT about the manner of GFC 1

Massive private debt was exposed through various banks worldwide.

GFC2 may continue to be a private debt matter, but it is more than likely to be a government debt issue.

You say governments can just print away and make the debt go away. I beg to differ.

In GFC1 the US printed stacks of money and plugged the holes in the private debt. The debt has now been transferred to the public purse.

In GFC2 the public purse is now in question. Government debt is exceeding its capacity to pay it back. OK you say print lots of money ..... NO.

Money printing requires government bond sales. What if there is no one interested in buying the government bonds on issue if the risk to too great.

Peddling government bonds during a period of sovereign risk is a very interesting mix. I'm waiting to see if bonds are increasingly considered a risky asset!

GFC2 will be far more pervasive and will strike much harder and for much longer. That is in essence the reason for austerity measures is it not - not expansionary debt creation whcih we saw in GFC1.

GC