Posted On: Monday - February 6th 2017 9:42AM MST
In Topics:   Music  Global Financial Stupidity
(Continued from here.)
Whew, again, this is not the most fun type of writing, but this stuff's got to be said, before the more interesting posts to come about the details in the current time, that could also point the reader to some of these primers for background - or one could read Zerohedge for 5 years running to get the big picture. You can do it the hard way, or you can do it the easy way ;-}
What about the rest of the world? Couldn't they bail us out if we get into trouble, kind of like we have done for them in the past? No, they could not, but they probably wouldn't have anyway, right? Looking back at countries with hyperinflation, say 1920's Germany or 1980's "the country formerly known as Rhodesia", from white-run breadbasket of Africa to black-run basket-case, we see that American dollars could at least be used by wise people to hold their wealth (or real money - Gold and Silver, of course). Loans from countries with well-functioning economies, usually the US were made to help in a transition from one economic meltdown to the next in Latin American countries in the past.
The problem now is not just in one country or even in one part of the world. Let's have a look-see around:
Even countries that seen to have their act together, such as Japan, turn out, upon readings of Zerohedge, to be in major financial holes of their own. Besides having a national-government debt of more than 200% of the GDP of the country, quite of bit of US Treasury bonds (debt) are held in Japan too.
Though the Chinese have the manufacturing might, such as that of 1960's America, the place still is run by Commies, so, on the scale of big-business, there is nothing like a real free market. Well-earned money is thrown into boondoggles and there is a housing bubble just like here, as people can not safely keep the monetary results of their labor in any other form. How can the people of this place create so much wealth (manufacturing, mining, etc.) yet be in so much debt? It comes from "mis-allocation" of assets - big projects get built that do not make money, and laws are changed daily to make financial dealing very uncertain. This kind of stuff would not happen in a free market. Were China a free-market with the people and infrastructure they have, hell, I'd be on the first
Then, there's the EU, run into the ground financially (and now, demographically) by the power-mad scum in Brussels.
Down under, you've got the Aussies and the Kiwis - their economies are not big enough to bail out the rest of the world, and Australia is being mined to supply China, so if China goes down, so do they. India has a large economy due to having such a large number people, but it will never be strong or solvent due to that same reason. Then there's the 3rd world, which is called that for a reason. Half of it is run by bailouts, so I don't believe they can help (shoot, maybe Øb☭ma's real family over in Kenya can pay a brudda back, mon).
I left out Russia, so far. I don't know enough about its current economy to write about it in general here, though I did recently read a lot about how bad the place was ravaged by foreigners in the 1990's after the Soviet Union fell apart. It's something that you didn't hear much about at the time in America, but it could be a good lesson. (Also, maybe we shouldn't try to start a war with them, eh?)
It's tempting to say "Hey, so we're all in the same boat - America is no worse - it's a zero-sum game", that kind of thing. American money is still the "reserve currency" used for international trading. That, and a comparison to other currencies is what's keeping it looking good now. However, a) the reserve currency aspect can not hold up, as we don't create enough wealth to support the Dollar. People and governments around the world cannot keep accumulating our currency, when it doesn't stand for much.
b) even if our currency looks good compared to that of other nations or "E-Unions", it's just what's called "the cleanest dirty shirt"*. All of the currencies are "dirty", so ours being the cleanest is not something that's gonna help us in the long run. This paper and those digits in the banks' hard-drives just don't mean what they used to. We're gonna find out soon what happens when this becomes common knowledge.
No, we're all in a big hole, folks. The first part of any solution is to stop digging, and we haven't even done that yet.
* I believe the expression came from this great Kris Kristofferson song titled "Sunday Morning Coming Down". Here is the song sung by Shawn Mullins: