Man in a Shed: The West looks bust

Thursday, June 23, 2011

The West looks bust

Everyone knows Greece is bust, but no one is allowed to admit it. Why ?
Because if Greece is bust so are key French and German banks, Spain, Portugal, Ireland and probably Italy.

And if they are bust, due to loans and the banking sector then so are we.

Someone has to pay, hopefully without dying in the process.

It seems to me that the West is bust ( yes US I include you ) and those of us with pension funds etc perhaps are going to lose them.

Can denial fix this ?

Sent from my HTC

1 comment:

TheFatBigot said...: I'm not so sure.

Greece is bust because the wealth it produces cannot generate enough tax for its government to service annual interest on its borrowing let alone repay the capital.

Germany, France and the UK each produce substantially more wealth than Greece and, year-by-year, can rebuild from any loss of capital caused by Greek default.

The US is in a special position, its current account is dire but the sheer size of its economy allows it to weather storms more easily than us.; 1:38 am

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The pound in your pocket

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists." James Callaghan

“The trouble with theoretical economists is that they don't understand that when you have a deficit, you can only finance it by borrowing, and you've got to persuade people that it's worth lending money to you and that they'll get their money back... there's no way of escaping it.” Dennis Healey during the 1976 Stirling Crisis.

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens ... Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." John Maynard Keynes, 1920.

"To preserve [the people's] independence, we must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude." Thomas Jefferson, President of the United States of America,1801-1809.

Inflation is taxation without legislation .. Milton Friedman