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[arbman]

In the end, when people start telling each other that their debt or money are no good anymore, the conversation ends there. I think if the world can come out of this global debt crisis in a peaceful manner, it will be the greatest political achievement of the man-kind, but the parallels to late 1930s and early 1940s are unmistakable. The only difference here is the economic collapse did not come because the central banks intervened, but it seems like the govts actually destroyed everything the central banks tried to smooth out the damage to a number of years. The inevitable defaults of private sector were only postponed to become public debt defaults. Now, it never felt like we are back to January 2008 so much before, only at the national levels. The growth never came back after the economies were told to carry the weight of the speculative debts that collapsed after the mortgage mania, both in Europe and US, and now China to follow. US even tried an amazing speculative pump into the economy while bailing out the banks and it didn't produce much of a multi-year sustainable growth either. The bottom line is the world was not ready to grow in the absence of a break through to outpace the monetary inflation that showed up in food to energy prices. So it is evident that everything the central banks did was squeezing the govts or public with more debt to pay off the speculators. Probably this was the worst worldwide monetary corruption that ever happened under the USD reserve currency. These policies were "exported" to the entire world, now the whole world has become a bubble. The collapse is unavoidable unless the govts now default and everyone kind of takes them easily, hard to imagine these will go down that way. Nevertheless, USD is probably about to loose its reserve currency status from here, Euro is about to be abolished with their disunion falling apart and China --the only major exporter and creditor to the world as they like to call themselves-- is about to find out that they never had any equitable and sustainable society anyway in the absence of the consumer West... Good luck to all of you, I don't want to know the end of this story.

Edited by arbman, 06 August 2011 - 03:16 PM.