“There’s an unceasing wind that blows through this night
And there’s dust in my eyes, that blinds my sight
And silence that speaks so much louder than words,
Of promises broken”
I hear a number of theories, regarding the future of our economy. On one side, we have the people who wear the rose colored glasses and live in a one season world. On the other side, we have the people who believe that society, as we know it, will break down completely; that it will be absolute chaos and anarchy.
I can’t say for sure that we won’t have a complete breakdown, but I do know that anyone who says the worst is over, or near over, has got their head way up their ass.
My research into the actual cause of the problems, indicates that the banks are holding about 20 trillion dollars worth of worthless debt-related derivative instruments. This was done, basically, in order for borrowers to get loans without having the collateral to back it up.
Once this practice took hold, huge amounts of debt were created, which lead to the housing bubble of the early 21st century. This debt is not likely to ever be repaid, as there is no practical way to come up with the 20 trillion dollars that would be necessary to unwind these positions. Continue reading Problems with the Economy