“The problem that goes unremarked, because nobody wants to talk about it, is the amount of debt in the world. Egon von Greyerz has referred to it on several occasions, and it must be roughly $200 trillion. This is in a world economy that would be about $70 trillion per year. When you superimpose on that another at least one quadrillion dollars of derivatives, many of which are seriously mispriced and are just riddling the banking system, there are no solutions to this.
The idea that we can grow ourselves out of this is preposterous because anybody who understand anything about Austrian economics realizes that the deeper you get into a credit cycle, the more and more debt creation you need just to create a real dollar of GDP growth. But the problem is we can’t support the debt we have right now. So the idea that we will have sustainable growth going forward is just vacuous. It isn’t going to happen.”
Read the complete article at King World News here.
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