Total Global debt is between 200 Trillion and 300 Trillion US Dollars. Most of this Debt is in the western world. Total Financial assets are about 70 Trillion US Dollars. The planet is technically insolvent.
We are in a debt deflationary depressionary spiral for which the only escape is via a hyperinflationary model. We screwed both ways. The possible consequense of all this is massive civil unrest and the breakdown of society.
Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent | zero hedgeFor Greece, with on and off balance sheet liabilities at over 800%, it's game over. For the Eurozone, with the same ratio at about 500%, it is also game over. For the US, at 500%+, it is, you guessed it (sorry Joseph Stiglitz), game over, but since we have the printers, it will simply take a little longer. Following up on yesterday's popular post on prevailing delusions as captured by Albert Edwards' colleague Dylan Grice, we present Albert's latest outlook. Please don't read this if you want to keep believing there is any hope left for the (developed) world.
But first some aeral photography from Dylan Grice, indicating just how far the US government is willing to go to get the population stoked about owning fixed (shouldn't it be called broken really?) income. With British QE over, and the country still to implement the same criminal annuitizing of 401(k)s that Uncle Sam is contempltating in order to make "Buy Bonds" a "voluntary" option one can't really decline, maybe letters on modern architecture building blocks is all that would works. As Edwards says: "I'm not sure leaving man-sized building blocks around the City of London is really going to make an awful lot of difference, but I suppose when your public sector deficit is around 13% of GDP, every little bit helps!"
Is there a solution to this mess? I was just thinking about a concept called debt forgiveness. This is a process were some or all debts are written off and cancelled. To avoid the impending doom, the cancellation of debt, a reset and a new financial system? Could civil unrest be avoided if people were cleansed of debt?
There are a lot of negatives and problems in this proposition I know. But its just an idea I had 15 minutes ago over a cup of coffee, please appreciate that and it is worth brainstorming at least.
Whether or not this depression is by accident or planned we have to seriously start thinking of radicle ideas and solutions as the clock is ticking.