‘Doomsday is apt.’
We’ve been living in a fool’s paradise for decades.
The standard of living we enjoy on the West is simply unsustainable.
The outlandish pension, social security, healthcare entitlement programmes (think California) have such a total debt and liability load that they put governments into a negative net worth.
Not by just a little, but exceptionally so, ranging from more than 450% of the GDP in the ‘low end’ (and the most prosperous in the EU) Germany to well over 1,500% of the GDP in Greece.
The USA and the UK are somewhere between those figures.
With the imminent arrival of Peak Oil, (when demand outstrips supply) unless there’s a massive increase in economic growth worldwide, something of the order of a new Industrial Age Mark Two, fuelled by some amazing new source of wealth, little real economic growth can be generated - and how likely is that?
As we us in the UK, the current lifestyle of Americans these days is maintained by borrowing and debt - the US running a $1.3 trillion deficit on government spending and struggling to simply pay the interest on a $14 trillion national debt.
And the most optimistic budget estimates I’ve seen for the US, foresee another decade of crushing deficits that will grow the official deficit by some $9 trillion and the real “unofficial” deficit by perhaps another $20 to $30 trillion, once you account for growth in liabilities.
Is that sustainable?
I’m not especially pointing the finger at the USA, as we in the UK and the EU are in a more precarious situation.
One wonders, who’ll be the first country to declare national insolvency?
My instincts are that when that happens, other countries will join the collapse and rapidly start falling like dominos.
The speed of the change in our fortunes could be frightingly swift.
What value will the paper currencies of all these (and how many?) countries be when the dust settles?