Conrad Black has just written a stellar column about the rampant debt throughout the world. With governments seemingly unwilling/unable to make the necessary cuts to reduce this debt, what eventually is going to happen?
Conrad Black has just written a stellar column about the rampant debt throughout the world. With governments seemingly unwilling/unable to make the necessary cuts to reduce this debt, what eventually is going to happen?
“what eventually is going to happen?”
We go back to passing silver coins,like the Romans did…or develop an under the table black market…your roof will cost you 30 chickens
Is it any wonder the Political Class of Chicago want to once again incarcerate Conrad Black.
If they accomplish this spiteful or indeed politically driven farce then the remaining part of Illinois and the U.S. mid west should secede.
Establish a “non large municipal entity”, such as Chicago; Los Angeles; greater San Francisco and New York City and force Washington D.C. to the sidelines.
The next step, read Conrad Black’s article and take action. Cheers;
Of the road taken. Of the road not taken. Of leadership.
Of PM Harper’s leadership: “serious economic problems in any part of the world, whether it’s through trade or financial institutions, have an ability to impact all of us.”
Of socialism:
>>> “Europe Staring Into Yawning Financial Abyss”
“It has come to this. A year after rescuing Greece from default, Europe is staring into the abyss. The bailout has proved insufficient. Greece needs more money, and it can’t borrow from private markets where it faces interest rates as high as 25%.
But Europe’s governments are reluctant to advance more funds unless other lenders — banks, bondholders — absorb some losses by writing down their debts. This, however, would constitute a default, risking a broader banking crisis that might torpedo Europe’s fragile recovery in France, Germany and elsewhere. There is no easy escape.
What’s called a “debt crisis” is increasingly a political and social crisis. Looming over the financial complexities is the broader question of the ability — or willingness — of weak debtor nations to endure growing hardship to service their massive government debts.
Already, unemployment is 14.1% in Greece, 14.7% in Ireland, 11.1% in Portugal and 20.7% in Spain. What are the limits of austerity? Steep spending cuts and tax increases do curb budget deficits; but they also create deep recessions, lowering tax revenues and offsetting some of the deficit improvement.
Just how long this grinding process can continue is unclear.”
http://www.investors.com/NewsAndAnalysis/Article/573597/201105271741/Europe-Staring-Into-Yawning-Financial-Abyss.htm
…-
“Greece’s problems could hit Canadian pockets”
“ATHENS – While he’s not ringing alarm bells, Prime Minister Stephen comes to Greece with a warning for Canadians.
“We all know from the experiences of the last two or three years that we’re in a global economy,” said Harper as Greek Prime Minister George Papandreou stood by his side. “And serious economic problems in any part of the world, whether it’s through trade or financial institutions, have an ability to impact all of us.”
That warning comes as much of the world wrings its hands over Greece’s massive debt problems and the European Commission warns that time is running out for Athens to reach a political consensus on its crisis plan.”
http://cnews.canoe.ca/CNEWS/Politics/2011/05/28/18206216.html
Many people don’t get debt. It seemingly has no meaning for them. They dismiss it as an abstraction designed to force us into conservative policies.
Meanwhile the countries … Greece, Spain, Portugal, Ireland, and perhaps Italy next … continue to topple like dominoes.
Me thinks Conrad is singing for his Lord’s Supper.
He is quite wrong about the UK as their productivity rate lags even behind that of France. (It takes more OT hours and longer workdays to produce the same old, same old products)- which is why almost every manufacturing car company has moved to the continent or even worse now to China and India.
Their legal system and especially human rights and immigration is nothing to hold a torch up to but then the EU is also somewhat to blame with another useless layer of bureaucratic intereference.
I like his ideas, but I find his prose style unbearably pompous..no one dares to edit him, I guess…
oh ya, let’s live like lord crossharbour off everyone else’s dime.
there. our debt probs solved.
Because debtors invariably outnumber creditors by a substantial margin, governments just as invariably solve the debt problem by devaluing the currency. The debts are thus satisfied nominally, in a pro-forma, legalistic way, while the creditors are shafted in a real sense. This has been going on for at least as far back as the Roman Empire, e.g., the inflation of Domitian (one of the main factors that brought down the Empire, . . . but that is a subject for another comment). True, this “solution” plays havoc with the institutional confidence in the credit markets that are necessary to sustain a monetary economy, but, hey, it solves the problem in a politically satisfactory way in the short run . . . and, as Keynes averred, and as most politicians heartily agree, “In the long run we are all dead.”
I’m really hoping PMSH uses this majority to make the cuts needed to help us better weather bumpy ride ahead the global market is bound to send our way. Time to get prescient.
just look at Zimbabwe, where a million dollar note would buy a book of matches or think Weimar when a wheelbarrow full of marks would be needed to buy a loaf of bread
Rabbit at 1:19 says “Many people don’t get debt. It seemingly has no meaning for them. They dismiss it as an abstraction designed to force us into conservative policies.”
Most lucid comment on the subject so far. This denial applies to personal finances as much as government finances.
Ever since Conrad Black spent some time off the ivory tower, AND handled it with dignity, I’m much more interested in what he has to say.
I know, it’s reverse elitism 😉
Lord Black is correct that an overload of debt is a problem. Of course he learned this point on other people’s dimes when, or pension fund surpluses that he raided, when he was a younger man.
Right message, but really the wrong messanger.
Netty:
I hear many people are attracted to murderers and other ne’er-do-wells. Maybe it’s the same “bad boy” effect.
I have no doubt that CB hopes that the UK will muddle through and find a way to prevent insolvency but I cannot see how they can avoid it. The UK’s current course on Green Energy alone guarantees that they will go broke. Once you add in their social problems, demographics, entitlements and lack of resources hope looks more like wishful thinking than rational thinking.
Justthinkin
The Romans were eventually guilty of mixing the silver with non-precious metals and therefore making them worth less.
Want to bet what happens after that? Gold standard and then debt notes?
Oh…
The key problem, in my view, is that societies have moved away from private enterprise capitalism, focused around small and medium local businesses, into national socialism.
National socialism removes the profits from these small/medium private businesses and distributes it, not for common uses such as roads, communications, health care…but private consumption. That is, for welfare and other individual subsidies.
Concomitant with this increased distribution of wealth to non-producing members of the society, was an increase in another set of non-wealth producing members of the society: the bureaucrats.
The two sets together have overloaded the wealth-producing capacities of the private sector.
The result is that the ratio of wealth producing to non-wealth producing has drastically tipped; the non-wealth producers far outnumber the wealth producers.
Any twit can see this can’t last.
But when you try to confront The Entitled, who are made up of the unionized public bureaucrats and the ‘unionized’ welfare and other state subsidized…riots break out. They feel that their ‘entitlements’ are ‘human rights.
The world has to move out of this statist socialism and back into private enterprise small and medium business capitalism. Reduce the size of govt and get rid of the tenured, unionized bureaucrats..and reduce the welfare and subsidized population.
We would be wise to reject these global trends explicitly, reduce our own debt, and prepare to guard our territory because a lot of people will want to move here. I imagine that our response will be less sharply defined than this, and we will continue to drift upward relative to other developed nations and will continue to welcome probably too many immigrants for our own good, so that we will have some of the benefits and some of the potential problems of this less dogmatic approach. Then the NDP will win an election one day and we will be sliding down the sides of the bowl into the same pit as everyone else. So might as well enjoy the somewhat good times while they last. I imagine that “Canadian values” as presented by progressives will ensure this result eventually, and then somehow when it all ends in disaster, they will find a way of blaming conservatives (who will likely be gathered together in gated communities with plenty of ammo). As I will not outlive this trend, I will say good luck to the young, and try like hell to prevail over the crazies.
Rabbit says to Netty:
“I hear many people are attracted to murderers and other ne’er-do-wells. Maybe it’s the same “bad boy” effect”
WT???????????????Huh? That’s on topic?
It’s obvious to many of us that the power equilibrium in the world is changing. Black makes some interesting observations that make sense to me. I don’t know if the USA has gone past the point -of-no-return in their silliness but I happen to think that Canada’s influence is in ascendancy, thanks to PMSH. I wonder if we Canadians have what it takes to provide global leadership. I think our PM does.
my gold bars feel really good when I pick them up . . . something Obama can’t have and can’t ruin.
I thought it was a good move by Prime Minister Harper to take Minister Clement with him to Greece, so as to point out what other finance ministers are facing and how insignificant the 4 Billion reduction is compared to what the Greeks and other European countries are faced with.
That is like me taking a child to the homeless section of town and pointing out that that is their fate if they don’t stay in school.
Justthinkin, When can you start? I have your thirty chickens and my roof needs to be replaced soon.
Fred, He can have them. It is not unprecedented for the gov’t to make the possession of gold bullion illegal.
ET
you hit the nail on the head with your post, t’is what I was explaining to a small bus. (farmer) person just recently
Dennis K
the fact that Tony Clement is rock solid, and his “position” would make it prudent to take him to Greece, he is Greek, and it is politically smart to bring him along on this trip:-)))
If I could have 5 minutes with Conrad:
(maybe the start of an on-going “5 minutes with” series)
1. Note to self: this guy does not suffer fools gladly, keep it short
2. Conrad, I enjoy your articles. I don’t always agree with everything and, sometimes, not even most of the things you are saying. (Especially on FDR and the success? of the Keynesian inspired “New Deals” and the more recent “been there, done that” too big to fail/TARP/stimulus (should have let normal Chapter 11 process take its course with the strong absorbing the weak banks, car companies, et al).
3. However, you make me stretch my vocabulary, writing skills, etc. and force me to go back to my history books (major) to re-read stuff I guess I might have glossed over or simply didn’t get the first time.
4. The challenge for you is to get off your lofty, pompuos (credit to already mentioned by BillBC) perch and turn from intellectual commentator (you’re already preaching to the converted for many of us on the US/Euro debt, QE I, II, III? (wait for it), money supply, stagflation thing) into the next “great communicator”/teacher in terms of helping average people really understand what this is all about, the dire future consequences, and what needs to be done to reverse the direction we are headed.
5. Time step up and to simple it down. If you can, you can make a great difference.
Re Conrad Black, two words. Massey. Ferguson.
As to the question “what will happen?”, I expect the same thing that always happens.
War. Most likely in Europe, they’re overdue.
ET@5:05 is right but think of Canada and SK as the place to start.
ET @ 5:05, exactly and the sooner Canada and the provinces tackle this problem the better. As we have seen in Europe lately, it is tough to turn the fiscal ship around when too many people become accustomed to the entitlements and the some politicians keep up the illusion to maintain power.
Peter O’Donnell @ 6:46
Unfortunately there is too much truth in your thoughts. When over half the population is taking more than they put in sustainability is moot. Canada is no better than the USA or the Euros, we have simply been living off Chinese commodity purchases worldwide. Many Canadians take comfort in this and think that it will continue no matter what happens.
2008 should have convinced the world that once ‘credit’ defaults all bets are off. Capital will go on strike and institutions, both corporate and governmental will fail. When the party of ‘sober second thought (the Republicans), cannot talk reality then the world is doomed. We can survive a Euro failure but not a USA failure.
for good or ill very little will be done prior to the 2012 election. That will be the pivot point, maybe a little earlier depending on who looks like they are goign to win.