The real existential crisis today [as in the 1970s] comes from the impact of global, sovereign, corporate, and household debt.
Global debt is crushing the superstructure that enabled our societies to survive and to thrive over the past fifty years. From Africa to South America to Europe to Asia to America the modern superstructure that supports the staples [food, shelter, etc] of life on our planet is imploding under the persistent pressure of debt. This is only going to get worst as interest rates rise and currencies devalue. The prosperity of the past seventy years [since the end of WWII] is being destroyed by the greed of governments, corporations, and households that can not stop borrowing and therefore increasing our collective debt burden.
Sovereign debt is growing because national governments are unable to stop spending more than they collect from their tax payers. These morons keep borrowing. These morons keep expanding M2 and increasing the velocity of money. These morons keep spending on their vanity projects and ignoring the dismal state of infrastructure that serve the basic needs of citizens. These morons are trapped in the belief that sovereign debt gives them a line of credit without limits. These morons are leading our world into a debt-plagued abyss.
Corporate debt is never a problem if the underlying business is a long-term asset to our social order. But today many corporates rely on government subsidies as their business strives to become a first mover in the transition to sustainable energy. And governments [EU, USA, Britain, Germany, Australia, etc] encourage them in this folly as they penalise those who use of oil, gas, coal, etc to power their lives. The truth is the current sustainable energy thrust is heavily reliant upon government subsidies which are backed by unstainable public sector borrowings.
Household debt is at unsustainable levels given that interest rates are about to enter a short-term cycle of sharp increases. Those who have a debt overhang due to home mortgages, small business loans, credit card debt, student loans, etc must find ways to reduce their reliance of borrowings. The discipline required for households around the world to reduce their dependence of borrowings is huge and many will not make that transition. Household debt will see many people around the globe face a sharp fall in their living standards.
Richard.
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