Governments are refusing to let markets clear: prices have not been permitted to fall to a clearing level. They put it off because the American economist Irving Fisher came up with a plausible theory about financial deflation in the 1930s, and they don’t want to face the bankruptcies of the over-indebted, the businesses that rely on the state for their survival, and the banks that have foolishly lent them too much money.
Reality is now catching up with western governments. Their underlying financial position is rapidly deteriorating, with welfare costs spiralling out of control and governments already heavily in debt. They cannot realistically underwrite the global banking system, which is insolvent and considerably larger than the governments themselves. The economic recovery which is the governments’ get-out-of-jail card will not occur without that economic readjustment.
We are long past the point of no return .. We have progressed to the point where governments have chosen to protect themselves, in preference to looking after the true interests of their electorates.
Governments are now reduced to screwing their electorates for their own survival, which is their last refuge from reality.
terça-feira, fevereiro 19, 2013
The final countdown
The final countdown: