22
countries are already in debt crisis; a further 71 could be soon
Key
points:
“...
China, another large surplus country, lends money from its
government, mainly by buying debt from countries with currencies used
in international trade such as the US (dollar), Germany (euro), Japan
(yen) and UK (pound).”
“One
explanation of the 2008 financial crisis is based on the interaction
between rising inequality and current account deficits. Increasing
inequality can reduce economic growth as higher income groups spend
less of their income than middle- and low-earners. But international
financial deregulation allowed countries to make up for this lack of
growth by running higher current account deficits for longer.
Borrowing more from foreign lenders allowed economic growth to
continue, even though little income was going to poorer groups in
society. Meanwhile, the rich put an increasing amount of their
growing share of national income into speculation and risky financial
assets. Rising inequality, along with financial deregulation, fuelled
the unsustainable boom in lending and increased risk in the global
economy.”
“The
average debt or lending level has increased from 31.3% of GDP in 2011
to 35.8% in 2014. This means that the total debts owed by countries,
which are not covered by corresponding assets owned by those
countries, have risen from $11.3 trillion in 2011 to $13.8 trillion
in 2014.”
“...
the average net debt or surplus level will rise to 39.5% of GDP in
2015; $14.7 trillion. Overall, net debts owed by countries will
therefore have increased by 30% – $3.4 trillion – in four years.”
“This
global debt level is driven by the actions of the world’s largest
economies. Of the world’s ten largest economies, eight have sought
to recover from the 2008 financial crisis by borrowing or lending
more, thereby further entrenching the imbalances in the global
economy. The US, UK, France, India and Italy have all increased their
net debt to the rest of the world. Germany, Japan and Russia have all
increased their lending to other countries.”
“...
Germany could have turned its large surplus into a small deficit,
by allowing workers’ wages to increase, enabling them to buy more
from its major trading partners. This would have allowed countries
with large debts to German banks, such as Greece, Portugal and Spain,
to export more to Germany, more easily reducing their own deficits.”
“It
seems the lessons of the financial crisis and the danger of these
global imbalances has not been learnt. Current patterns of global
trade and finance are sowing the seeds of the next global crisis.”
Full
report:
A
"prophecy" is about to be confirmed?
“Armstrong
predicts that a sovereign debt crisis will start to unfold on a
global level after October 1, 2015 – a major pi turning point that
his computer model forecasted many years ago.”
(fa.ev/a-global-sovereign-debt-crisis)
Governmental debt is inherently undemocratic. Public debt undermines democracy by allowing government employees and elected officials to fund projects citizens may or may not want.
ReplyDeleteDeficit government spending allows oligarchs who easily purchase governments and politicians to avoid taxes, sell products and services to the financially captured government, and be paid with borrowed funds that only the common folk are required to pay back.