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How can the world focus in solutions when everything is now at risk?

How can the world focus in solutions when everything is now at risk?

The devastation of Hurricanes Harvey and Irma are just the latest in a long line of financial problems that the United States, Europe, and the rest of the world can’t afford to pay for.  And as we head into the most volatile time of the market year, the question that crops up is how can individual nations, or the global community, focus on economic solutions when nearly everything is now at risk?

  • Wars:

    • North Korea – South Korea – USA – Japan – China – Russia incl. nuclear war
    • Ukraine – USA – Russia
    • Syria – Israel – USA – ISIS – Al-Qaeda – Saudi Arabia, Yemen – Iran, Iraq  etc
    • China – India – Pakistan – Afghanistan – USA
    • Plus many more
  • Civil war and terrorism:
    • In most countries including USA and Europe
  • Economic risk:
    • Global debt $230 trillion – can never be repaid, nor financed when rates normalized
    • Unfunded global liabilities $250 trillion – will never be honored
    • Central banks’ balance sheets $20 trillion – all insolvent
    • USA insolvent – only supported by overvalued dollar and military
    • China’s debt explosion from $2 trillion to $40 trillion since 2000 – massive bubble
    • Most industrialized and emerging countries only survive with QE – untenable
    • Interest rates at zero or below in 20 countries – unsustainable
    • Paper money system –  currencies going to zero.
  • Financial risk:
    • Global derivatives of $1.5 quadrillion – will all implode as counterparties fail
    • Bankrupt European banking system – unlikely to survive
    • Over-leveraged global banking system 20x to 50x leverage
    • Bubbles in most asset classes – Stocks, bonds, property
  • Political risk:

    • USA has a lame duck president – risk of irrational or no actions

    • EU elite –  unelected and unaccountable –  destroying Europe

    • Trend of globalization and socialism – very dangerous for global stability – King World News

Perhaps it should be no surprise that all attempts at finding solutions are coming from agencies seeking to completely change the current monetary system.  Cryptocurrencies are offering individuals the chance to bypass their native devalued currencies while the BRICS coalition has recently proposed a return to the gold standard, starting with oil sales and a rejection of the dollar.

In the end of course, any real solution would mean an end to the current financial order, and the end of the uni-polar system run by the United States.  But this scenario will not come easily or without a bloody fight from Washington, as all one needs to see is their current discussion on eliminating the need to reign in spending (debt ceiling) which will make most of these ongoing risks magnify 100 fold.

Kenneth Schortgen Jr is a writer for The Daily EconomistSecretsofthefed.comRoguemoney.net, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.


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