Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent

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Fri, 02/12/2010 - 12:02 | 228444 Cognitive Dissonance
Cognitive Dissonance's picture

"My own view of developments, for what it is worth, is that any "help" given to Greece merely delays the inevitable break-up of the eurozone."

Everything else after this statement is simply an explanation of how the delay will (or will not) be implemented, where the problems are, who will and will not resist etc.

The fat lady has already sung. The game is over. The only question is who will recognize this first, second, third etc and how will they (we) deal with this reality? The article ends very nicely with the following.

"The take home is very, very simple: we can delude ourselves that the game can be won (it can't), or we can prepare for the imminent collapse when delusion finally fails."

Fri, 02/12/2010 - 12:38 | 228522 walküre
walküre's picture

The "game" cannot work.

The disease is socialism. The symptoms are government intervention.

A government cannot run health care, social security, education and so on.

Those are all bottomless pits.

The bankers just found "magic" to keep the show alive so governments could be "free".

Behind the scenes the actors are fighting who exactly is promising what to whom.

Mistakes were made throughout. We're now just realizing that the "magic" is ending and that the systems will collapse eventually.

Greece's problem is so much socialism that it will inevitably fail first. The 40 years of uber-socialism in the East Bloc were just setting the stage.

Fri, 02/12/2010 - 12:57 | 228568 Miramanee
Miramanee's picture


I think that the term *Socialism* misses the mark.
It ascribes a political and socio-econ construct that
does not fully apply in the case of the Global
Financial Crisis. The failure isn't Socialism, it is
Monetarism. More succinctly, the collapse of
civilization as we have come to recognize it---which
WILL occur within the next several decades---is the
direct result of international standards of currency
NOT being tied to a finite commodity (gold i.e.) and
the innately human "flaw" ( to use Greenspan's words)
of unbounded avarice. Greedy, power hungry men, all
of whom possess the ability to "print" money in an
effort to grow their wealth and retain their power,
have destroyed the least this iteration
of the world.

Fri, 02/12/2010 - 13:45 | 228680 WaterWings
WaterWings's picture

I think that the term *Socialism* misses the mark.
It ascribes a political and socio-econ construct that
does not fully apply in the case of the Global
Financial Crisis. The failure isn't Socialism, it is
[avarice]. More succinctly, the collapse of
civilization as we have come to recognize it---which
WILL occur within the next several decades---is the
direct result of international standards of currency
NOT being tied to a finite commodity (gold i.e.) and
the innately human "flaw" ( to use Greenspan's words)
of unbounded [monetarism]. Greedy, power hungry men, all
of whom possess the ability to "print" money in an
effort to grow their wealth and retain their power,
have destroyed the least this iteration
of the world.

There. Much better. Can't help you with the decades thing.


Fri, 02/12/2010 - 21:06 | 229337 dnarby
dnarby's picture

Decades?  Two years on the outside.

Fri, 02/12/2010 - 23:47 | 229489 steve from virginia
steve from virginia's picture

The failure isn't socialism or avarice per se but financeialism, which is the substitution of paper claims for real work leading to excess claims on future labor.

Labor is leveraged with petroleum that has risen in price five- fold in ten years. $20 oil and there is no financial crisis anywhere.

Financialism is a hedge. It can only fail as it is a fantasy against resource depletion reality. The ultimate outcome outside of choosing to live within one's means is repudiation of claims and the breakdown of trust. Without trust there is no modern economy.

Sun, 02/14/2010 - 09:55 | 230539 Anonymous
Anonymous's picture

Best comment so far. Thank you!

Oil gave us a very big lever to play with and for the last decades it has grown always longer.

Now it grows shorter. Even if we can keep up production for a while, the EROEI is getting worse. Problem is, our whole economy relies on growth and that growth relies on expanding use of natural resources.

Until fusion energy gets large-scale economically viable, we are stuck now with a shrinking resource base. In the end that means the world population has to be reduced by a few billion people.

The coming decades won't be very pretty and aside from being a genius and finding us a new energy resource we can grow upon, there is exactly nothing anybody of us can do against this.

Mon, 02/15/2010 - 15:44 | 231671 Anonymous
Anonymous's picture

However, you fail to understand that the "level" of natural resources is itself, a fantasy created to limit production and encourage power-grabbing.

We have hundreds of years of natural resources (oil, coal, nuclear) that we can access now... if environmentalists didn't keep us from accessing them.

Fri, 02/12/2010 - 13:50 | 228687 Anonymous
Anonymous's picture

Well Done

Fri, 02/12/2010 - 14:37 | 228790 walküre
walküre's picture

Excuse me.. when the very notion that government can guarantee health care, pensions or other social security, welfare and public education IS socialism.

We are not an equal society. Some have it and some don't. Some CAN really make it and some don't. It's always been that way.

Nothing wrong with private entities or individuals stepping up to the task and offering sponsorship.

BUT we have created a government for the people, no matter where the people come from whether they can hold a job, have education, have what it takes or will ever be able to support themselves.


Government is the problem. It is too big, it is too intrusive and it has created a nation of irresponsible junkies that look for assistance from government any which way they turn.

California is OUR basketcase and prime example of how stupid it can get when government is out of control and self serving.

Reduce 50% of all government across the board, close schools and cut welfare.

Watch and see what happens when people HAVE no choice but to fend for themselves and that includes providing education for their kids.

Maybe just maybe then we as a nation have a chance.

FYI .. I have seen the destruction of a people with too much government dependency first hand in several East Bloc countries. 40 years of propaganda and mismanagement have left those places in shambles until the West picked up the pieces.

The West however is suffering the same disease because popular promises were made that CANNOT BE AFFORDED.

Fri, 02/12/2010 - 15:48 | 228940 Anonymous
Anonymous's picture

Is Cuba running deficits? What about Norway? Are you sure it is socialism? If you want 'freedom' and don't want to live third-world-like, then YOU HAVE TO PAY YOUR FUCKING DUE. Do you like things like relatively 'honest' police? Ask people in Singapore if they would rather live in the 3rd world conditions like the Malaysians or would they rather have social control and pay their taxes. This group is way too sheltered.

Fri, 02/12/2010 - 17:02 | 229058 Thomas
Thomas's picture

It's fascism, not socialism--centralization of power.

Fri, 02/12/2010 - 18:55 | 229203 merehuman
merehuman's picture

A Rose by any other name..lala fill in the blanks.  Naming it aint gonna help. Helping the populace that would be a good thing. Anybody here done a good thing lately? (not for profit).

Am educating neighbors, got armed and enuff rice and beans to cover myself and neighbors.

Meanwhile as a cons. cont. i still do the few jobs that come my way. Been giving away a silver round now and then to entice them to educate themselves. The garden is doing fine leaving a peaceful comfort in my heart.

Some of us have PMs . That will be the seed money for the unknown future, to re establish our community.

Healers, traders and transporters will have a fair future as well as farmers and second hand stores. I see the new world as a better, simpler life style. Too bad so many have to suffer betwixt now and then.

When the semis quit coming, its too late.

Fri, 02/12/2010 - 20:24 | 229294 perchprism
perchprism's picture


Here's a link to the top 100 things you need when TSHTF, and that run out first:

Get some rice, beans, powdered milk, and can goods.  Canning jars and a canner.  Extra garden tools, seeds, 12-gauge shotgun, .22, .223, .357 (or 9mm handgun), and plenty of ammo.  Gold and silver.

Fri, 02/12/2010 - 22:43 | 229400 Master Bates
Master Bates's picture

You're a biotch.  How dare you make any threat whatsoever to me.  I'm not going to forget what you said yesterday, and you're lucky that it was on the computer and not face to face...

Now go hide behind your anonymousness, and just know that you're probably as weak as the man in your avatar.

Fri, 02/12/2010 - 22:58 | 229436 perchprism
perchprism's picture


Tough titty, punk.  Why don't you do us all a favor and eat a bullet, you miserable peckerhead.

Fri, 02/12/2010 - 23:27 | 229467 Master Bates
Master Bates's picture

Well, you're just lucky that you're hiding behind a computer is all, believe me.

Fri, 02/12/2010 - 23:39 | 229479 jomama
jomama's picture

can i have your autograph, tough guy?

Sat, 02/13/2010 - 04:25 | 229652 Master Bates
Master Bates's picture

If you ask real nice and pay me a dollar.

Wed, 02/17/2010 - 23:27 | 235045 Anonymous
Anonymous's picture

It's not as if a dollar is going to mean much a in a couple of years.-

Sat, 02/13/2010 - 00:36 | 229543 Anonymous
Anonymous's picture

i would pay to see master bater rip your head off and shit down your neck!

Sat, 02/13/2010 - 04:26 | 229653 Master Bates
Master Bates's picture

If you ask real nice and give me a dollar... LOL.

Or some of that GOLD BITCHEZ!

Wed, 02/17/2010 - 23:28 | 235046 Anonymous
Anonymous's picture

Enjoy your worthless dollars.

Mon, 02/15/2010 - 00:31 | 231166 Anonymous
Anonymous's picture

Good link, thanks!

Fri, 02/12/2010 - 18:55 | 229202 Anonymous
Anonymous's picture

Agree. Pay your due (taxes) or live behind barbed wires fences and always carry lots of ammunition. Ever been to a third-world country?

Americans are indeed too sheltered (and spoiled...oh...did I mention IGNORANT?).

Fri, 02/12/2010 - 21:45 | 229367 walküre
walküre's picture

Another myth that the great US public education system fabricates.

The rich pay taxes.

Guess what. The rich could pay 100% taxes and your shit still wouldn't get paid for.

There's too much government body and not enough support from ALL Americans.

You think you're $15.95 income tax per month makes a dent?


Sat, 02/13/2010 - 05:28 | 229673 Anonymous
Anonymous's picture

Shift the decimal point two spots to the right. And yeah it does make a dent in my checkbook. You are right about the rich paying taxes and the public re-education system.

Fri, 02/12/2010 - 23:55 | 229498 Anonymous
Anonymous's picture

what a fucktard.....thanks for proving your

Sat, 02/13/2010 - 01:50 | 229594 Anonymous
Anonymous's picture

wow.. so let me get this straight.. if all those GREEDY SCUMBAGS in haiti or cuba or somalia would JUST PAY TAXES, they could be a first world country? why those greedy bastards

Sat, 02/13/2010 - 00:34 | 229540 mouser98
mouser98's picture

you presume that we actually have to have government to stave off "3rd world conditions."  however, last time i looked, all the 3rd world countries had governments also.  perhaps it is not an overpriced government that is needed after all.

Sat, 02/13/2010 - 22:46 | 230305 Anonymous
Anonymous's picture

Malaysia 3rd World....that's a bit much

Fri, 02/12/2010 - 16:04 | 228971 kurt_cagle
kurt_cagle's picture

In the US, the budget for the Dept. of Defense is roughly the same as the budget for all other departments combined. Most of the R&D investment in the country - from education to the national science foundation to efforts with Ag, Energy and others - makes up perhaps 1/100th of the total expenditures for the military/security sector. The R&D investments insure a qualified work force, competitive leads in business and technology, and similar dividends. The DoD and related work forces insure only the ability to project US dominance in the rest of the world, protecting the power of the oligarchy. Tell me in what way the US can be considered to be even vaguely socialist when we farm out health care to the private sector then wonder why no one can afford health insurance.

Now, slash the budget of the military by 90%, bring home the troops, build a sensible defense posture for a country with two friendly adjacent neighbors and a buffer of two oceans on either side, and maybe, just maybe, those budget deficits would very quickly become surpluses. So before you get on your high horse about slashing schools and cutting welfare, ask whether we need to have an arsenal of tens of thousands of nuclear missiles, thousands of ships, a standing army of more than 3 million and the largest air force in the world.

Fri, 02/12/2010 - 16:27 | 229012 baldski
baldski's picture

Right on kurt-cagle.


The military-industrial complex that Eisenhower warned about runs congress and the President along with the bankers. They are afraid to slash anything.Why do we need 120+ military bases around the world? Ridiculous expense! Let's start turning swords into plowshares and maybe we can save our democracy.



Fri, 02/12/2010 - 19:44 | 229247 Anonymous
Anonymous's picture

120 in 1959 perhaps. It's over 700 now.

Sat, 02/13/2010 - 00:43 | 229549 Anonymous
Anonymous's picture

Not disagreeing that we are in too many countries, but seriously we don't have 700 based or event 120 bases around the world. Name them, give me a link. If you are counting the Marines at our embassies or a military attache, then you might get to 700 locations.

We have troops in large numbers in Iraq, Afghanistan, Japan, Italy, Germany, South Korea, and maybe a few more.

That being said, we subsides other countries safety. We should scale back and let other countries take some of the cost.

Sat, 02/13/2010 - 08:17 | 229700 kurt_cagle
kurt_cagle's picture

Actually, we have bases in most countries in Europe, Japan, the Philipines, India, several African countries, Panama, Nicaragua, Paraguay, Mexico, Canada, Israel, and so forth. Admittedly, many are small outposts, but it's actually surprisingly difficult to find countries that don't have US forces deployed somewhere.

The question about subsidizing other countries' safety is an intriguing one and difficult to either confirm or refute. Do US troops in S. Korea deter the N. Koreans? In many cases bases were established to provide staging during early conflicts and never fully decommisioned after the conflicts ended.

Sat, 02/13/2010 - 10:03 | 229731 SABTrader
SABTrader's picture

I doubt you'll find a list of all US military bases in the world on the internet. I know we have one here in NW western australia.

Thu, 02/18/2010 - 23:01 | 236987 Anonymous
Fri, 02/12/2010 - 16:43 | 229037 SWRichmond
SWRichmond's picture

I don't want the MIC or nationalsocialist health care.

Fri, 02/12/2010 - 17:37 | 229111 Anonymous
Anonymous's picture

Then you can start a business that allows people to buy additional insurance for Cadallic coverage. There are plenty who need it and plenty to fund it.

Sat, 02/13/2010 - 10:32 | 229746 Anonymous
Anonymous's picture

You know, I have said the same exact thing, I'm not sure what the problem is with that? Then companies have only low risk/rich people pools that get their own rooms and other benefits, and they pay more for it.

Seems ok to me to provide a baseline standard service and expect companies to innovate and find new products to build on top of it.

Fri, 02/12/2010 - 16:58 | 229055 BS Inc.
BS Inc.'s picture

Oh for crying out loud, you want to add some facts to that rant?

When you factor in the spending at the local and state level, hardly any of which is military related, the government spends probably about 10% of its yearly budget on military-related items.

Fri, 02/12/2010 - 17:25 | 229093 Anonymous
Anonymous's picture

Why are you factoring in local and state? Jerk-off.

Fri, 02/12/2010 - 18:08 | 229157 WaterWings
WaterWings's picture

The military-industrial complex dominates wikipedia!

Sat, 02/13/2010 - 08:23 | 229704 kurt_cagle
kurt_cagle's picture

How much of local and state goes towards police forces? For that matter, how much of the federal budget goes into national guard units? Or the Army Corps of Engineers?

I'm not trying to wave a large liberal flag here - I'm former military and come from a military family; I'm just of the opinion that the military/security infrastructure is far larger or more costly than it needs to be given a purely defensive rather than offensive stance. The organization has placed too much emphasis on expensive technological gadgets to provide "the edge", and many of those, once field tested in most of the likely theatre of campaign, generally don't prove themselves.

Fri, 02/12/2010 - 18:27 | 229177 ConfederateH
ConfederateH's picture

Well said walküre, but I don't think that it is possible to put the toothpaste back into the tube.

The European socialists bought their elections since the end of WWII by borrowing from the future to buy votes and accuse anyone who was more prudent of being a greedy capitalist.  For decades the Democrats have pointed to Europe and claimed that those greedy, capitalist Republicans just wanted to rob the poor and middle classes and that all we had to do was ignore the constitution and give free health care, free universities, free abortions and free retirements to everyone and the US would reach nirvana just like Europe.

Well anyone with any sense can see that the parasites have finally killed the host.

Fri, 02/12/2010 - 19:12 | 229220 Boop
Fri, 02/12/2010 - 16:27 | 229010 No More Bubbles
No More Bubbles's picture

Yes, the collapse WILL occur, but it will be in the next few years, not decades........

Fri, 02/12/2010 - 17:53 | 229141 Ripped Chunk
Ripped Chunk's picture

"Greedy, power hungry men, all
of whom possess the ability to "print" money in an
effort to grow their wealth and retain their power,
have destroyed the least this iteration
of the world."


Could not agree more with your statement.  I just want to know when we get to start killing them?

Mon, 02/15/2010 - 01:10 | 231184 Anonymous
Anonymous's picture

> NOT being tied to a finite commodity (gold i.e.)

We are not in a manufacturing/industrial economy any longer. The valuation of IP and services, the basis for all future growth in "the developed nations" is far more inchoate and not easily understood (and certainly not currently understood), and this fact lies at the heart of the current issues, just as failure to understand the nature of an industrial economy led to the Depression in the 1930s.

Money is a defacto substitute -- a proxy -- for the real goods it represents. Hence money "production" (i.e., the amount in circulation, both real and virtual via electronic form) needs to be tied to the actual worth of new production less consumption. This cannot be effectively done by tying it to some ridiculous fixed quantity like gold, which inevitably leads to constant inflation as the relatively fixed quantity of gold comes to represent a continually increasing quantity of goods -- assets (IP as well as real physical properties).

"The Gold Standard" is hence a really, really stupid idea for a dynamically and rapidly increasing economy such as that which has existed since the 1940s, if not the 1920s.

There does need to be some realistic metrics and correctional mechanisms tied to the "quantity of money available", as well as rules to rein in both government spending (which any damnfool would know should long since have been REQUIRED to submit itself to GAAP, and one could easily argue this is a major source of the inherent problems from the government's end, at least), as well as any tendency to resort to the printing press to "make" more money than actually is being produced. But The Gold Standard is a flat out stupid idea of a means for doing so.

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