Bad News: Greece is caught in a debt trap...
"Reducing or stabilizing their high debt levels encounters the same stubborn contradiction: The effort to curb debt through higher taxes or lower spending initially weakens economic growth, and weaker growth increases the debt." (RCM-Robert Samuelson)Worse News: Much of the developed world is also caught in a debt trap...
"In 2014, gross debt as a share of GDP was 132% for Italy, 246% for Japan, 95% for France and 105% for the U.S., reports the IMF." (RCM-Robert Samuelson)Also, our own Puerto Rico is next up in the bankruptcy docket.
Under normal circumstances...
...countries in such economic straits could clamp down on domestic spending and consumption and export their way out of it, kinda like China's has built their powerhouse economy for the past two decades.
Speaking of China, it's stock market is melting down, and the crash would make Greece look like a pimple on a gnat's ass.
Anyway, With all the big consumer economies in debt and suffering anemic economic growth, the China solution is not an option. It's one starving neighbor trying to borrow another starving neighbor's last egg.
"the world now sits beneath a mountain of debt worth an astonishing $200 trillion. That’s greater than twice the global GDP, which is currently $75 trillion." (Forbes)Lord help us if interest rates go up, which is what would happen if we tried to inflate our way out of it or write down sovereign debt.
There is talk of Greece suing Golden Sacks, but what if they took it a step further?
I think it would be kinda fun to see Greece, Italy, Spain, Portugal and whatever other debt-laden countries lock up and refuse to pay, putting their global bankster un-indicted co-conspirators in a serious sweat box.
The next step would be for the 'richer' sovereign nations to seize the global banksters' assets and clap the global fraudsters in jail.
The story of how the Catholic hierarchy and France's King Philip took out Jaques de Molay and the Knights Templar provides a classic roadmap. Catholic leadership (richer nations) was jealous of the Knights' (international banksters) power, and Philip (poorer nations) was deep in hock to them.
What if we collectively wiped out all debt around the globe?
$ Global financial markets would collapse, and productive activities that are credit-dependent would grind to a halt
$ Critical quotidian activities like delivery to grocery stores would cease
$ Pension funds would collapse, since they hold a lot of this debt
What do you think would happen?
Could the same big governments that clamped down on the global banksters take action to ameliorate the negative fallout?
Read this for better answers than I have provided: What effect would clearing all world debt have?
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