Even without changes to the current spending policy, the government’s spending is on an unsustainable path. By the time a child born in 2018 reaches retirement age, the United States national debt will be six times the size of the economy according to an analysis released this week. Continue reading
STOCK markets across the world plunged today amid growing fears China’s monstrous debt bubble is about to burst and trigger a devastating financial crisis.
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Investors are becoming increasingly nervous the world’s second-largest economy is about to trigger a crash, which could be worse than the stock mayhem witnessed at the start of this year and last August.
China has been taking on yet more debt in what is thought to be a bid to combat its economic slowdown.
The Asian country’s deficits reached 237 per cent of GDP in the first quarter of this year, from 148 per cent at the end of 2007, according to the Financial Times.
With interest rates at a 5,000-year low, are we really surprised that a crash is coming?
The International Monetary Fund (imf) is warning that a financial crisis is practically guaranteed, and it’s just a matter of time before it strikes. The organization’s newly released Global Financial Stability report is sobering reading. The flaws in the global financial system have not been fixed, it says.
It highlights soaring global debt, particularly in emerging markets. The implication is that we could see a repeat of the 1997 currency crisis also known as the “Asian Flu,” which saw massive currency devaluations, contractions in global trade, economic turmoil, and social instability.
But conditions are much more dangerous today than back then. Virtually the whole world is teetering on recession, the West and Russia are back in Cold War mode, the Middle East is engaged in actual war in Syria, and the world is more interconnected than ever—potentially making the transmission of financial diseases much quicker. Continue reading
WASHINGTON/BERLIN (Own report) – Regardless of who will win the presidential elections in the United States, German political observers are not anticipating a change of course in U.S. foreign policy. “It is essentially immaterial who wins,” predicts an expert at the German Council on Foreign Relations (DGAP). That country’s “enormous economic problems” leave the next US president with “hardly any margin of maneuver.” And according to the CDU’s Konrad Adenauer Foundation, one can “more than likely expect a continuity, rather than a change” in the coming U.S. foreign and military policy. The Republican candidate, Mitt Romney’s aggressive rhetoric can “be considered, with good conscience, to be the baying of an electoral campaign.” Observers agree that Romney – like Obama – will reinforce US presence on China’s East and Southeast Asian periphery. It can also be assumed that he will continue the Democrat president’s drone wars, should he win the elections. Both will order military attacks on Iran, if Iran should equip itself with nuclear arms, the Adenauer Foundation predicts. Berlin must adapt itself to this situation. Continue reading
Global Geopolitics 