"Submitted by Charles Hugh Smith from Of Two Minds
The Coming Global Instability, Part I
The root causes of global financial instability cannot be wished away or "solved" with modest policy tweaks: they are systemic.
Systemic financial instability is spreading rapidly around the globe. Nobody knows the precise timing, of course, but if we consider the systemic causal forces at work, it seems the future is now: the next few months could see unstable markets gyrate wildly and unpredictably as the latent instability breaks out and plays out into the 2012-2013 timeframe.
This is an excerpt from my new book An Unconventional Guide to Investing in Troubled Times which has just been issued in Kindle ebook format; a print edition will follow in September. (You can read the ebook now on any computer, smart phone, iPad, etc.--see below.)
Here are a few of the structural causal factors behind the coming global financial instability:
1) What was once considered “impossible” has been normalized to the point that truly unprecedented imbalances are now accepted as "normal." But the normalcy is illusory.
For example, it is now considered “normal” that the Federal government borrows $1.6 trillion every year to prop up the Status Quo, fully 11% of America’s Gross Domestic Product (GDP) and 40% of all Federal expenditures. This stands in stark contrast to the traditional view that deficits in excess of 3% of GDP a year are inherently destabilizing. Now we borrow roughly four times that much (including the off-budget “supplemental appropriations” that run into the hundreds of billions of dollars every year) and the political and financial Elites evince a complacent faith that these extremes are benign and sustainable..."
at http://www.zerohedge.com/news/guest-post-coming-global-instability-part-i
The Coming Global Instability, Part I
The root causes of global financial instability cannot be wished away or "solved" with modest policy tweaks: they are systemic.
Systemic financial instability is spreading rapidly around the globe. Nobody knows the precise timing, of course, but if we consider the systemic causal forces at work, it seems the future is now: the next few months could see unstable markets gyrate wildly and unpredictably as the latent instability breaks out and plays out into the 2012-2013 timeframe.
This is an excerpt from my new book An Unconventional Guide to Investing in Troubled Times which has just been issued in Kindle ebook format; a print edition will follow in September. (You can read the ebook now on any computer, smart phone, iPad, etc.--see below.)
Here are a few of the structural causal factors behind the coming global financial instability:
1) What was once considered “impossible” has been normalized to the point that truly unprecedented imbalances are now accepted as "normal." But the normalcy is illusory.
For example, it is now considered “normal” that the Federal government borrows $1.6 trillion every year to prop up the Status Quo, fully 11% of America’s Gross Domestic Product (GDP) and 40% of all Federal expenditures. This stands in stark contrast to the traditional view that deficits in excess of 3% of GDP a year are inherently destabilizing. Now we borrow roughly four times that much (including the off-budget “supplemental appropriations” that run into the hundreds of billions of dollars every year) and the political and financial Elites evince a complacent faith that these extremes are benign and sustainable..."
at http://www.zerohedge.com/news/guest-post-coming-global-instability-part-i
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