Great article by Ambrose Evans-Pritchard of the Financial Times today surveying the seemingly never-ending nightmare which is our present global debt crisis. Read it here: Five years on, the Great Recession is turning into a life sentence.
But this too shall pass. It is not going to be a permanent recession, history assures us that the world will work its way through present problems: deficits will be curtailed one way and another, bankers will be disarmed of their financial powers of mass destruction and the real economy will finally find its way back to organic growth. And yes large spending cuts are required. But so are large debt write-offs–more money has been loaned than can ever be paid back. It is necessary to admit this truth–admission is the first step to recovery. Here’s Ambrose:
“Much of the debt will have to be written off. Whether this done by inflation (1945-1952) or default (1930-1934) will be the great political battle of this decade. Pick your side. Pick your history.”