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Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited
Compare total debt with total assets: the total value of world equity markets amount to only $44 trillion dollars in USD equivalent. Im not too sure what exactly this indicates, other than, perhaps, the amount of inflation ready to leak into the global system. All these bonds are so much money printed. Most of it belongs to the governments like Spain, Ireland, Greece and United States who are now also ready apparently to stand behind insolvent banks, as we all know The world thus has a negative net worth of about -$38 trillion measured in USD..as Sovereign republics and democratically elected politicians bail out bankers who loaned money to non working people to buy houses and also non working non accountable governments and corporations to build those societies and the houses.. giving a new twisted meaning to the old phrase, as safe as a house .
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Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited
As the Economist reports headlines are all about sovereign debt at the moment. But that is only part of the problem. Debt has risen across the economy, from consumers on credit cards, though industrial companies borrowing for expansion and financial companies using debt to buy risky assets.The interactive graphic above shows the overall debt levels for a wide range of countries, based on data supplied by the McKinsey Global Institute. In theory there is no maximum level for debt relative to GDP, but Ireland and Iceland (not on this map) found the limit in practice when they hit eight-to-ten times GDP. Total world Sovereign debt is about 46.4 trillion dollars basis 2012 with another 36 trillion private sector debt worldwide........... We<Economist> have also updated a sovereign debt table we published in February, ranking countries in terms of their primary budget balance, debt-to-GDP ratios plus the relationship between the yield on their debt and economic growth (if the former is larger than the latter, the debt burden is getting steadily worse). Spain has now taken over from Greece as the country in the worst position. Heres the table:
Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited
Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited
economy. Five trillion dollars was pumped into foreign banks alone to keep them afloat. In his latest report, Williams said, The U.S. and global financial markets remain extraordinarily volatile and unstable, with systemic instabilities offering the potential, again, of systemic failure. Following the collapse of Lehman in 2008, the U.S. Treasury and the Federal Reserve committed to preventing a systemic collapse at any cost. They created and spent, loaned or guaranteed whatever money was needed to forestall systemic failure, kicking the proverbial can down the road. Most of the actions taken then and since, however, were stopgap measures; little was done to address the systemic and economic crises fundamentally. At present, the system has moved enough further along the road that the can likely will be kicked again. Now, though, the road ahead drops off a cliff, well within current kicking distance. I think the kicking distance and the cliff are somewhere between now and early 2013.
chaos enters the picture and everything changes. Chaos, by definition, is not predictable
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Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited
The U.S. and Western economies would all face insolvency simultaneously, with the U.S. first in line. The entire Western industrial/consumer/credit economy would fall apart so fast it would make your head spin. The supply chain would stop and stores would empty quickly. The USD would fall over 50% in one weeks time and then temporarily stabilize before its final last gasp Worldwide currency panic would set in paralyzing whats left of the world economy which means the emerging markets would stop dead too. China would have a revolution, or go into military mode, which would be even worse. A one-world currency would be demanded and implemented. Asia would fare fare horriblyIf Western consumerism goes away, then the entire foundation of the Asia macro economy would instantly crash and stop cold. Do you remember what happened that fateful last quarter of 2008, after the Lehman debacle, and the world banking system almost collapsed en masse? Exports from China and Japan for example collapsed over 30%! Dont think economic demand cannot stop on a dime, because we already had one very scary case of this in 2008. So, all the pundits aside, Asia would get killed too economically. The big question is, could they successfully adapt to a new economic paradigm before they have their own revolutions and a change of guard ?
Shamik Bhose Executive Director Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited Www.microsec.in ; www.commoditylive.in