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This time it's no different : Comments
By Ross Elliott, published 7/10/2011What goes up must come down, but in economies, the reverse is generally true too.
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-Banks around the world are still overloaded with bad debts.
-Greece can barely afford to pay it's interest bill, and if it defaults then many Billions of "assets" will turn out to vanish from other bank's balance sheets. The domino effect will be huge...but is hidden by "accounting" practices. (should be "un-accounting")
-Once falling, the dominoes will bring other European nations to their knees (Italy, Ireland, France). This could push the US into dire financial territory.
-Around the world falling assets will have to eventually be marked to market...then the smokescreen will fall and real losses will have to be admitted to.
-China has it's own inflation and currency issues...they too have been overloading on debt based on bubble asset prices.
-The bailout of private capital by governments cannot happen again...and de-leveraging is still seen as part of the problem...not the solution. It's like an alcoholic looking for a solution to the addiction that does not include the "problem" of not drinking!
-Biggest issue: Governemnts and business are complicit and dishonest as to what is happening and why. All attempts to pre-empt and prevent the bust are dismissed as "negativity" and "doom mongering"...when in fact they are responsible warnings.
Economics is so poorly understood that the public are easily duped into stupid behaviour. The rise of sucker "mum and dad" investors, the rise of inflation as "wealth generation", and the moral hazard of banks and investment companies being "too big to fail", able to freeze funds and trade while insolvent while the rest of the economy is expected to pay their dues: Corruption and theft has become acceptable so long as it is done by folks on obscene salaries.
Bring on the movements for change.