The problem with this article is that it suggests that there is no debt crisis – just a ‘growth crisis’. Is that not just another way of saving ‘debt crisis’, because we are saying that we cannot create more debt because we cannot sustain it. We are saying that we can create more debt, but debtors will lose; and in that case it will be the Chinese and Arab investors. i.e. The debasement of the USD will spiral away, and a new currency will have to be created. That brings about two things:
1. A moral crisis
2. A conflict over debt with Arab’s who control the oil
3. A conflict with the Chinese, who might be inclined to takeover Taiwan, so they don’t look stupid.
It is true that US are holding mostly tangible assets like property or businesses; but any paper assets will be debased. It will hurt some Americans.
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Author
Andrew Sheldon
