Submitted by Terence Blackett
What Happens When An Unstoppable Force Meets An Immovable Object? Global Collapse Disorder & Destruction of the World’s Economic System
“Sooner or later we will all have to sit down to a banquet of consequences.” – Robert Louis Stevenson
Debt has been the wealth of the rich. David Korten warned us of “When Corporation Rule The World” that it would result in an instability that would ruin the lives of many – as major banks like Goldman Sachs, JP Morgan Chase & Barclays have run our world into a colossal derivatives bubble of some $800 trillion and growing. Although most are asking for greater accountability given a market out of control which keeps pressing an ideology of rapacious exploitation of environmental resources, as well as bedeviling the lives of the working poor with a debt mountain to climb – hardly ever seeing any individuals held responsible for their failures and negative outcomes brought about by their gambling actions.
The Apostle James in chapter 5 verse 1 through 6 pens: “A final word to you arrogant, rich (FOLKS): Take some lessons in lamentations. You’ll need buckets for the tears when the crash comes upon you. Your money is corrupt and your fine clothes stink. Your greedy luxuries are a cancer in your gut, destroying your life from within. You thought you were piling up wealth. What you’ve piled up is judgment. All the workers you’ve exploited and cheated cry out for judgment. The groans of the workers you used and abused are a roar in the ears of the Master Avenger. You’ve looted the earth and lived it up. But all you’ll have to show for it is a fatter than usual corpse. In fact, what you’ve done is condemn and murder perfectly good people, who stand there and take it.” (Cited from The Message Bible)
Divine justice served!
In 1720, noted cosmic-classical scientist Sir Isaac Newton bought investment shares in the trading company South Sea Company making him a wealthy man. Like many notable Europeans of his time who became rich off the backs of slavery and the misery of other human beings, as Newton’s wealth grew, his investments increased in the South Sea Company, eventually losing some £20,000 – a king’s ransom for that time, which almost sent him to the poor house.
But there’s a historical lesson here!
In Britain at that time, credit was at such an exorbitant level, with the Bank of England being so overleveraged, that the economy went from BOOM to BUST in 1797 and the bank had to be bailed out. So nothing new under the sun! The same occurrence took place again in 1825 and by 1844 the (BoE) had to receive assistance for the 3rd time.
We are on a similar trajectory in 2016/2017!
Due to Britain’s vast slave, cotton, sugar and mineral wealth from its pillage of its colonial slavery hubs, by the 1860’s, English banks had invested or loaned out so much of its customers’ savings – holding only 10% to 15% of deposits in reserve resulting in a MARKET CRASH by 1866 which almost brought down the entire house of cards and like the collapse of the then Lehman Brothers of the time – the banking house Overend Gurney & Co was the catalyst behind the fall.
Yet the pundits of economic history keep getting blindsided to the cyclical nature of human folly!
By 1873, forty years after the Emancipation Proclamation, ushering in the end of the commercialization of human capital by British Quakers like William Wilberforce et al, Britain was by then the largest economy in the world. Britain’s empire status had been created from the plunder, pillage, poaching and trade in human cargo, creating wealth from misogyny, murder, malfeasance and from ethnic mayhem – wealth which today still props up these beleaguered monolithic nations.
Fast forward 143 years to 2016, Britain’s is the 6th richest nation in the world with a 2.8 trillion GDP according to World Bank figures yet with a DEBT to GDP ratio of 90.6% (Eurostat) with only France higher at 93.5%. Britain’s current DEBT is climbing to £1.7 Trillion with each person carrying a DEBT-LOAD of about £27,000 and DEBT per taxpayer of £46,000. These levels are unsustainable in the current economic climate given the DEBT-CLOCK of all major developed countries.
The conundrum we face posits the stark reality that the top 1% richest in our world received 95% of all gains in income wealth distribution which included BAIL-INS & BAIL-OUTS and with such profound levels of wealth inequality in the hands of the global ELITE – stashed away to the tune of some $52 trillion in offshore tax havens like Barbados, Bahamas, BVI, Cayman Islands, Panama and other Caribbean financial holding centres as well as other tax exile holding centers around the world, makes for a very polarized world indeed. This concretization of wealth is literally in the hands of 388 richest people in the world who own the same wealth as the poorest 50%.
In a new Oxfam report showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population but moreover, the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400 million in the same period; the wealth of the 62 richest individuals increased their wealth by $500 billion to $1.76 trillion.
Conspiracy or disparity?
The Oxfam report calls for urgent action to deal with this insalubrious trend showing that 1% of people own more wealth than the other 99% combined. The charity said that, in 2010, the 388 individuals dropped to 85 by 2014, then falling again by 2015 – concentrating greater wealth in fewer hands. The charity further stated that as much as 30% of the Africa’s financial wealth of its billionaires was thought to be held offshore with an estimated loss of some $14 billion in tax revenues – enough to pay for healthcare for mothers and children that could save 4 million children’s lives a year and employ enough teachers to get every African child into school.
This damning report on man’s voracious greed and wanton avarice! Yet if we look at how we got here, it is clear to see the DEVIL is truly in the details.
On 22nd October 1981, the national debt in the United States stood at $1 trillion for the first time in its history, having taken 200 years of US history to reach that staggering figure. However, despite taking 200 years to hit the $1 trillion debt ceiling, it merely took another 27 years to rack up another $9 trillion in debt – a 10-fold increase.
By the 30th September 2008, America’s debt had crossed the $10 trillion mark for the first time.
So in less than 8 years after hitting $10 trillion, the US government reported that it had hit the $19 trillion mark. So by 2008, with a major stock market crash, the banks had to be bailed out, in order to save the world markets from an Apocalypsus.
But where did all that money go?
Only God really knows – as most speculate into the coffers of Goldman Sachs et al.
America’s volatile debt levels are now estimated to reach some $30 trillion by 2026. Given that it took them just 9 years to rack up the last $10 trillion, it’s anyone’s guess how quickly this ceiling will be met.
Canada is not far behind, as it is also carrying historic amounts of debt which Justin Trudeau’s government will have to manage given their exposure. And it’s not just their credit cards and mortgages that are weighing on their wallets and the economy. Combined federal and provincial debt in Canada will top $1.3 trillion this year, according to a new Fraser Institute report. So even with a new government, Mr. Trudeau will find it increasingly difficult to stem the tide of borrowing to pay for essential services given the fragility of their bonds and sovereign wealth funds which does not paint a rosy picture for Canada’s investment & growth climate.
China is also in the dock, as the 2nd largest economy in the world finds its woes in the news of late, as the market is imploding and defaults are going through the roof – fueled by real estate and shadow banking, with property vacancy rates in Zhengzhou at an astounding 23% rate, as the government puts Chinese taxpayers on the hook.
China’s total debt has nearly quadrupled, rising to $28 trillion by mid-2014, from $7 trillion in 2007. At 282% of GDP, China’s debt as a share of GDP, while manageable, is larger than that of the United States or Germany. According to data from the US Geological Survey and China’s National Bureau of Statistics that was compiled by the Financial Times, in just 2 years (2011 and 2012), China produced more cement than the United States produced in the entire 20th century with much of the development in infrastructural projects – bridges to nowhere, zombie train stations, and infamous ghost cities resulting in rescue packages having been launched in large cities such as Wuxi, Nanning, Hangzhou, Tianjin, Tongling and Zhengzhou.
Japan is another JOKER in the house of cards given a budget for the current fiscal year that started in April 2014 totaling some 90.3 trillion Yen with a current debt clock of some $8 trillion and counting and with the current deficit financing bill allowing Japan to sell 38.3 trillion Yen in government bonds to fund the budget with the remainder being funded by taxpayer revenue, non-tax revenue and income from bonds earmarked for public works projects. Government expenditure is forecast to reach 43.9 trillion Yen by the end of September.
Assuming that the deficit financing bill does not pass, the Japanese government would have only 46.1 trillion Yen on hand resulting in the government possibly running out of money by the end of the fiscal year. Japan already has the world’s largest debt burden to GDP ratio, the size of its $5 trillion economy, and a breakdown in fiscal spending could increase skepticism that politicians are losing their grip on public finances where total government debt amounts to over 200% of the country’s entire GDP – a figure so large that the Japanese government spends 51.5% of the 43 trillion Yen ($430 billion) they collected in tax revenue just to pay the interest.
We’ve purposely left out the European Union as the fiscal analysis required for its individual nation states remains complex and to treat it as a whole makes even ECB figures appear doctored.
Finally, in the Caribbean, the situation is even more poignantly austere given that our developing economies – with precious few raw materials, dwindling exports and higher per capita living and income cost, find “a lot of the Caribbean countries are stuck in a classic debt trap,” says Carl Ross of Oppenheimer, a securities firm.“ The result has been a string of sovereign defaults in the region since 2010, in Antigua & Barbuda, Belize, Jamaica, St Kitts & Nevis as well as Grenada. Despite debt restructurings, Jamaica, St Kitts & Nevis still have government debt of more than 1.4 times of GDP. As a result, investors’ appetite for more Caribbean debt remains uncertain given that Barbados had to recently shelve an attempt to raise $500m in international markets.
A January 23rd report in the Wall Street Journal reported that investors pulled $58.7 billion of cash from “developing countries in recent years; particularly vulnerable, in investors’ eyes, were countries that regularly import more goods and services than they sell abroad,” which included Barbados and virtually the entire Caribbean.
According to Gail Hurley of University of Sheffield – she believes that by almost any measure, the Caribbean is one of the world’s most heavily indebted regions in the world. The recent 2008 financial crisis only made a difficult situation worse. Debt-to-GDP in the Caribbean stood at an average of 70.3% in 2012; for the Eastern Caribbean currency union the figure was over 91% in the same year. St. Kitts & Nevis is the most severely indebted country at almost 200% of GDP, closely followed by Jamaica at almost 150% (compare this to Greece with a debt-to-GDP ratio of 160% in 2013 and Portugal at 127%).
In Jamaica, debt service has consumed nearly 50% of total budgeted expenditures over the last 4 fiscal years, while health and education combined have amounted to only 20%. In Grenada, a similar picture can be found: in 2013, debt service consumed about 41% of government expenditures, education and health combined just 16%. At the last count, an incredible 37 debt restructuring programs across 12 Caribbean countries since 1990! That’s more than one per year. Something clearly isn’t working and governments like the Stuart Administration in Barbados needs fresh visionary fiscal thinking if they are to avoid a major devaluation in the dollar.
Conclusion
We have reached the fiscal CLIFF!
It is impossible to continue to restructure DEBT – overleveraging fragile economies and placing greater AUSTERITY upon the shoulders of the poorest in our world.
British PM David Cameron has been the first scalp in this evil process. Unsustainable levels of monetary madness include printing monies out of “THIN AIR” and funnelling vast amounts of pseudo-wealth into the hands of banksters, crony capitalists & evil oligarchs will only be a recipe that fast tracks us into that looming fiscal abyss.
Every government on earth seems impotent to stem the tide! The horses have bolted from the stables. There’s no coming back from this precipice. Collapse protocols will do nothing to help when the house of cards stacked with mindless JOKERS come crashing down.
May God have mercy on the starving billionaires who will one day have to stand in a soup line for a piece of stale bread the Devil kneads and a bowl of porridge brewed in the cauldron of witches.
So while some “trust in horses and others trust in chariots – let us put our trust in the name of the Lord God.” (Psalms 20:7)
Maranatha!
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