The idea that Gordon Brown rescued the world from an economic crisis three years ago and that now we're in a period of "recovery" is a fantasy of the highest order. Almost none of the problems revealed in 2007/8 have been fixed. In my opinion there are bigger economic disasters ahead of use. Just take a look at this recent interview with Alan Greenspan where he talks very seriously about a US default in the near future. He says that it all depends on Greece!
One may ask how on earth the tiny economy of Greece could have any impact on the mighty US economy. The answer is that the world economy, with its ridiculous levels of borrowing, is like an ever taller tower in a game of Jenga. The taller the tower the less it takes to make it topple. If there is a mighty crash when Greece defaults, it won't really be the fault of Greece, it will be the fault of governments around the world allowing the tower to get too tall. Debts that could not be repaid should have been defaulted on years ago - allowing the debts to carry on rising will be seen in years to come as a disaster.
Friday 1 July 2011
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