Many organizations around the world, particularly governments and banks but also ordinary people, have too much debt. This has created a global debt crisis that is quickly spiraling out of control. It appears that Europe is in the most immediate danger since Greece is almost out of money, and this will ripple out to the rest of Europe. But it’s not just Europe. The United States government has probably already reached the point where either default or massive inflation must inevitably result, and it’s just a question of when. Japan also has debt problems, and China has a giant real estate bubble. And because all these great economies are so linked to each other and to the rest of the world, these problems are threatening the entire world financial system. The age of fiat currencies, central banks, and fractional reserve banks may be coming to an end.

Since I last mentioned this issue, I’ve been following it closely. Here are some references I’ve found to help understand what’s going on.

Doug Casey and Casey Research

The things Doug Casey have been saying about the economy are downright frightening. One point he keeps making again and again is that governments are not just responding to the crisis by doing the wrong things, they are doing exactly the opposite of the right things. By that he means they are increasing spending, snatching even more wealth from the most productive members of society, and redistributing it to the biggest losers. This is not only not fixing the problem, but accelerating the collapse.

• Debt, Doom and Opportunity
• We are exiting the eye of the storm
• The Economic Crisis II
• The Economic Crisis I
• Something Wicked This Way Comes
• Prepare for social upheaval
• On Bernanke: Be Afraid II
• On Bernanke: Be Afraid I
• Gold’s new high, the Fed, and the greater depression
• The American Debt Crisis - online event

Zero Hedge

Zero Hedge is a financial blog written by Tyler Durden—a pseudonym that probably represents more than one person since his/her/their output is so prolific—which is extremely well informed and lacking in the censorship of mainstream media. (I believe mainstream media is too afraid of accidentally causing a financial crisis by merely giving out bad news—which actually could happen since fractional reserve banks are so inherently fragile—to be trusted to actually say the truth.)

• Don’t store your gold in the US
• Buffet’s move (buying Bank of America) marks the beginning of the end
• The Only Thing We Have To Fear Is Fear Itself... And Governments Telling Us What To Fear: Why The Beginning Of The End Started With FDR's Confiscation Of Gold
• The System is Coming Unglued
• This is the Real Deal
• Europe is Finished
• It’s time to start calling this what it is: a depression
• What happens when a nation goes bankrupt?
• Is the US financial system on the verge of collapse?
• Japan has debt that is 230% of GDP

See Zero Hedge for more.

Miscellaneous

Here are some other links from various places around the web.

• Has Warren Buffet just called bank bottom?
• That sucking sound is the Fed
• They are setting the stage for violence in this country
• Wall Street aristocracy got $1.2 trillion
• Ignore reality at your own risk
• The many collapses of Keynesianism
• 25 signs the financial system is about to hit the big red panic button
• September and October are going to be terrible
• When will America collapse? (Soon.)
• Retire off $30,000
• Goldman Sachs says the economy will collapse
• Krugman on the collapse of the Euro
• George Soros: Does the Euro have a future?
• Austria restricts gold purchases by individuals
• The case for hyperinflation in the US
• 21 signs something big is about to happen in the financial world
• A fictional account of QE4
• A Bank of America collapse and the next Lehman event
• Is financial instability the new normal?
• I hope you’ve taken the last few years to prepare
• Is the US government buying food in preparation for a major economic crisis?
• Busted Europe

I remain unconvinced that the entire world financial system is going to collapse in the near term for the simple reason that this is in basically no one’s best interest, and the powers that be (primarily, central banks and governments) are going to do everything in their power to prevent this from happening. However, Doug Casey makes a good point that they are so confused about reality that they are likely to make things worse, accelerating the collapse. So I consider a near term collapse to be a significant possibility, but not a certainty.

Long term, however, a collapse is more likely, because of the inherently fragile nature of fractional reserve banking, central banks, and fiat currencies, and due to the unfairness of the system, which is unstable in light of the growing democracy of information enabled by the internet. The people won’t stand for injustice as they gradually come to understand the nature of the system that is enabling the elites to win at their expense.

More articles in the archive.