Vox Day in this article on the dire sign of Dubai implies the default of Dubai World is just the start of the unraveling of tens of trillions of dollars in world debt everywhere. The article contains a pretty compelling graph as it compares excessive debt in the world to the 1930’s and world gross national product.
The problem with excessive world debt is not limited to the United States. That is why those who just think only the dollar is going to crash are short sighted. The whole world banking system is going to fail. Many nations have been spending way beyond their means. Now everyone with major investments owns the IOU’s of the world not just the debt of the United States. Most banks and investment companies owe far more money than their assets are worth today if they had to sell. They are hoping that if they can hang on to these investments long enough they will regain their value. That is just wishful thinking. One day soon a fire alarm is going to go off and and everyone is going to run for the exits at the same time. When that happens expect worldwide martial law and a world full of wars when many nations try to secure tangible resources by force.
A prime example given of the dire debt situation is this article that questions if Britain is also on the brink like Dubai. I think Britain is on the brink, but you could take this article and insert the United States, Japan, Spain, Mexico, or many other nations and most of what is said in this article would apply just as well to them. The whole world is on the brink. Like Fox Day seems to suggest in his article above about two-thirds of the world debt is never going to be paid. Think of the implications of that for the standard of living of people everywhere.
I have read worse horror stories today than these articles, but even though they might come true they are more speculative, so I will pass on the more conspiratorial nightmares.
The bottom line is really this:
I wrote on the world debt problem ten years ago and updated it earlier this year. Everything I said in that article still applies and is happening before our very eyes. Do not believe the latest nonsense that the world financial crises is over and that we are now going into a recovery. We are just going further in debt and the massive debt burden will just make the next crises far worse than the last. With the debt hanging over the world the economic depression has hardly even begun yet.
The world debt is like a house of paper cards with IOU’s written on them. Dubai is only one IOU that was taken out but that card may be super-glued together and put back in to keep the house up a little longer, However, there are countless other IOU cards coming due and each of them can bring the house down if it is not promptly remedied. Soon world events will bring a strong breeze and the temporal repairs will not hold, and then the whole house of debt will come crashing down. Perhaps the breeze could be an attack on Iran or a war on the sub-continent or just more massive defaults. Who really knows? But, sooner or later people are going to realize that there is 35 trillion dollars in excessive debt in the world and realize that those IOU’s can never be paid and then there is going to be a real world panic.
The world across the board is in worse shape than the early 30’s after the stock market crash of 1929. Remember that the crash of 29 did not cause the world depression it was excessive government spending and debt as compared to their GNP that caused the depression. Everything that followed including World War II was just the inevitable consequences of certain people that thought they could regain their good life of excesses by finding scapegoats and taking the resources of other nations.
The economic collapse today cannot be averted because professional politicians that run our most prosperous republics have to please those who get them elected and re-elected. Therefore, they will never make the hard choices and will continue to approve massive new spending programs. They will do all they can to ease the pain in the nation until the next election by borrowing but they know full well that the end results will mean higher taxes and stagflation for generations. As if those generation could even pay the interest on the debt that they are racking up but this is increasingly unlikely
I gave the only real solution at this point for the United States in my last post. So there is little point in repeating it again. In short, the solution is to default on our own debts before the other nations do and go back to a constitutional government and constitutional monetary system rather than become perpetual slaves of international monetary power brokers that have been driving the world to the brink for their own idealistic purposes of world government and a world currency. They certainly could not run the world any better than they run their own homes and nations so why even buy into the world governance lie?
