The attempt to solve what was essentially a global debt crisis with mountains of more debt means we will have another global financial crisis – the question is when rather than if – and this will have an impact on our economic recovery and on asset prices and hence the importance of diversification in terms of geography and where and how they are owned.
In a world where currency comes into existence as a debt, and the interest on that debt cannot be paid until new currency is created in the form of new debt, governments are left with a choice between:
- continuous debt expansion and borrowing
- or deflation and possible depression and economic collapse.
As such, unless and until the debt based system is replaced, there can only ever be an increasing debt load and an urgency for economic growth with the consequent degradation of our environment and a debt enslaved humanity.
The above edited comments – and those below – come from an article by Mark O’Byrne which can be accessed here.
The solutions offered in a report by the McKinsey Global Institute, entitled “Debt and Deleveraging”, analyzes the debt situation in 47 different countries – 22 of which have advanced economies and 25 with developing economies – particularly with regard to dealing with government debt, and focuses, unfortunately, on ever more government and corporate power and financial repression.
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