Greyerz: The Everything Global Collapse Will Be unlike Anything Seen in History
The comments below are an edited and abridged synopsis of an article by King World News
The inevitable consequence of the current global debt bubble will be the bankruptcy of the financial system and many of its participants.
As the US and European banking systems come under pressure, the Everything Collapse will cause disruption in financial markets of a magnitude never experienced before. Since the global financial system touches every financial player in the world, from sovereigns to private individuals, no one will escape the Everything Collapse.
How will the Everything Collapse begin? It has already started, but the world hasn’t noticed yet. Four collapsed banks have already been shaken off by investors as a minor headache that was cured by a few hundred billion dollars of central bank aspirin.
As Hemingway said, you go bankrupt first gradually and then suddenly. But no one should be deceived by the gradual phase of bankruptcy we are in at the moment. We have just had the final warning. This phase might last a few months longer, but it is the last chance investors have to put their houses in order.
The Everything Collapse is primarily a debt crisis. Global debt has trebled in this century and if we include derivatives (a major part of which will become debt), we are looking at up to $3 quadrillion. This is 20X global GDP and of a magnitude that will cause major harm to the world.
Up for discussion: US and European banks’ risky balance sheets; consequences of high rates and credit contraction; the consequences of the Everything Collapse; and gold is eternal money.