In 2007 it occurred to me that the amount of debt in the world was impossible to repay. The amounts owed were so staggering and intertwined that default risks clearly threatened both the debtors and the lenders. I opined rather simplistically that the solution seemed to inevitably require crossing off zeros around a table to forgive and start fresh. That still seems to be a likely outcome ahead. Of course that will destabilize many of the major “power brokers” in the world today. And so it should…
The next two clips offer some worthwhile discussion on the scope and complexity of these issues. Complex and yet simple really. Bad debts are bad. They can't be repaid and they should not be backstopped. Governments need to stand aside and let the correction process run its course.
A very disturbing thought however is that the mid-term upheaval today may well stall again any serious efforts to get the reform and restart process needed underway. Frankly both parties are a profound disappointment in their propensity to be bought and paid for by the banksters. See Post-election risks: less limits and oversight of banks:
“The most powerful executives in the banking industry didn’t go to the government. The government came to them.
Ben S. Bernanke, the chairman of the Federal Reserve; Timothy F. Geithner, the Treasury secretary; and regulators like Mary L. Schapiro of the Securities and Exchange Commission and Gary Gensler of the Commodity Futures Trading Commission made their way last month to a room called the Nest at the Willard InterContinental Hotel in Washington. There, the members of a group called the Financial Services Forum awaited them.
The event with the forum, which is composed of chief executives, underscored how influential banks, brokerage firms and insurance companies remain in Washington, despite all the critical campaign rhetoric from the White House, Capitol Hill and other quarters. And Tuesday’s midterm elections are likely to leave them in an even stronger position, blunting the most serious overhaul of financial regulations since the Great Depression.
The widely expected prospect of a Republican takeover of the House of Representatives and possibly the Senate would be warmly welcomed by the banks, who want a break from the regulatory push of the last two years. Divided government makes it harder to pass new legislation and brings with it other benefits for the banks, like reducing the chances of an increase in corporate taxes.”