This article is machine translated by Google from Norwegian
As Ny Tid has written about in several previous articles, large parts of the industrialized world are bankrupt. In cooperation with the international banking system and the central banks, politicians are pushing the problems ahead, and have themselves become part of the problem. A mountain of public and private debt, which is the result of unrestricted financing of more and more welfare goods, is being solved by printing money, ie servicing debt by taking on even more debt. This is the logic of a drug addict. We balance on a knife edge that ultimately gives the death blow to the patient, who is the welfare state. Before that happens, money printing and a manipulated low interest rate will lead to even bigger and unmanageable bubbles in the economy.
The graph illustrates the problem. As a result of money printing, the total debt level is significantly higher today.
For the sake of example, let's assume that the debt is equal to the gross domestic product (GDP) in all of the above countries. Furthermore, debt is serviced at an interest rate of five percent and GDP grows by three percent. Then the debt in ten years will be 163/134 = 122 per cent. It is this calculation that explains why debt in Greece has grown from 220 to more than 400 billion euros since 2008 and 2009. Although politicians and central banks continue to print money – that is, even more debt that taxpayers will have to repay in the future – for To keep an artificially manipulated interest rate even lower than today, this calculation will continue to deteriorate.
Something as extraordinary as negative interest rates, where the depositors are in practice charged with interest by the bank, is no solution – for the depositors are very likely to withdraw their money from the bank. Then the banks go very fast. As the world's richest man Warren Buffet recently stated to US media: "If I have to pay to have my money in the bank, I have to consider taking them out."
In other words, it is mathematically impossible to grow or save yourself from the problem – all debt works like a pyramid scheme. The only thing that prevents the economy from collapsing is even more debt. However, like all pyramid games, it will eventually collapse.
Only possibility is collapse, as the situation is in virtually the entire industrialized world.
Several doomsday prophets. An increasing number of reputable economists and investors are now abandoning the eleven-dollar money-making and quantitative easing of politicians and central banks, as this does not result in anything but an even greater deficit. David Stockmann, former budget manager for President Reagan, and Paul Craig Roberts, former editor of the Wall Street Journal, are two of many prominent economists who are critical. Jim Rogers, former partner of George Soros and one of the most successful investors of modern times, sums it up:
"We have every reason to be very concerned. This will be much worse than in 2008. The world has too much debt. We are going to see bankruptcies and mass unemployment. It is a spin-off that governments and central banks tell us that the solution is even more debt at the top of already unsustainable levels of debt. ”
It is impossible to predict when the collapse will occur and exactly what will trigger it. It's like standing on the edge of a huge snow shovel. You do not fall right away, but you realize that you will fall sooner or later because you see what forces are turning – just wait for the snowflake that starts the avalanche. The catalyst can be anything: for example, Deutsche Bank, which is increasingly considered a bankruptcy candidate by shareholders and analysts, declares itself technically bankrupt and asks for protection from the German state. Greek banks that are kept artificially alive by the European Central Bank (in fact German taxpayers), join the draw. The same goes for a debt-laden European banking system with Spanish, Italian and French banks at the forefront, with non-performing loans accounting for between 20 and 30 per cent of the balance sheet, which means that depositors' funds and equity have been lost several times already. DNB and the rest of the Norwegian banking system are following suit. Or it could be China, which no longer manages to pump enough fresh money into an economic system suffering from chronic overcapacity. Or maybe it will be a natural disaster?
"We have every reason to be very concerned. This will be much worse than in 2008. »
Norwegian politicians without understanding. In Norway, politicians are discussing "currency exchange", while deficits are increasing and the Oil Fund is being drained of money. The short version is that for years we have run the country with a government budget deficit of 13-14 per cent – in 2016 a staggering 21-22 per cent. All companies that waste so much money eventually go bankrupt. As usual, politicians are concerned about the symptoms – unemployment – and not the disease – over-consumption and deficits. Politicians can thus decide to hire ten workers who dig a trench, and ten workers who fill it again. Unemployment is declining and gross domestic product is growing, but it is not providing lasting growth and solution to the fundamental problem: an ever-smaller private sector paying the bill for an ever-larger public sector. We are getting poorer, not richer, by increasing the public sector by 20 additional trenches.
Horror Scenario. Much indicates that economic collapse is inevitable and imminent. Imagine that it is triggered by a collapse in China or Japan while we sleep, or a stock market crash in the US before we go to bed – and that we wake up to deployed police at all key public buildings and facilities. The government declares the state of emergency. Banking is closed indefinitely, as in Greece and Cyprus to avoid one bank runs where depositors want their money. Liquidity in the banking market is rapidly drying up. Huge derivative and equity portfolios created by banks with the blessing of politicians to enrich shareholders and bank management – and at the expense of depositors and taxpayers – lead to the wiping out of the world's financial markets in a matter of hours or days. The ATMs close, and without cash, society stops. Air traffic stops. Bus and rail as well. Transportation of food and medicines stops. The food shelves are emptied, and the military is on guard to prevent the people from breaking into the stores to obtain vital goods.
In the media, we can daily see how a social collapse is taking place in the "socialist paradise" Venezuela. The long-term effects are an avalanche of bankruptcies, enormous unemployment, social unrest and migration, as it was in the 1930s. The danger of political extremism getting a foothold in the population is increasing, and so is the danger of war.
Venezuela light. In Norway, the fall height is greater than in most other countries. Politicians and bureaucrats' control over the people and the economy are a kind of Venezuela light. In Venezuela, they lack toilet paper and other groceries. In Norway, we run out of butter and other foods on a regular basis, while sending surplus stocks on cheap sales to Europe. The solution is as always several laws and regulations – price control, distortion of competition and import protection, ie good old fashioned socialist wreckage. Venezuela has the world's largest oil reserves, but imports oil. In Norway, the left will shut down the oil business and introduce ironing shirt and oatmeal. We can laugh at the comparison, but tragically, the similarity is greater than we dare admit.