July 8, 2015

359 words 2 mins read

China Is Crashing and Greece Is Spinning Out of Control

The world is even more fragile than it was in 2007. The big banks are bigger. Aggregate bank assets are concentrated in fewer hands. The bank derivatives books are much larger. Market liquidity is worse.

James Rickards, The Daily Reckoning

Well, ain’t that just dandy?

And it’s undeniably true. We were told that the 2008 financial meltdown was caused by entities that had grown too large: banks, insurance companies, corporations, derivitives. They’d grown too big to survive and too big to fail.

Their investors and lenders were wealthy and connected. They used their connections to nudge politicians to transfer their losses from private companies and individuals to government balance sheets. Governments, after all, can collect debts at the point of a gun while private companies are limited to annoying debt collection calls.

To cover their tracks, politicians passed ridiculous laws written by the very failed business people who caused the problem in the first place: big banks, Wall Streeters.

And the result has been predictable. As James Rickards reminds us:

  • The big banks are bigger
  • Bank assets are concentrated in fewer, more powerful hands
  • Derivitives are bigger and more opaque
  • Liquidity is worse
  • And the central banksters are out of ammunition

Obama’s State Department is busy giving away the farm to Iran in pursuit of a “legacy.” But Obama’s legacy will be this: he left the world less stable, less democratic, less equal, and less optimistic than he found it.

We have a hell of a mess to clean up. It will likely consume the rest of our lives. At least, the rest of the lives of Boomers and Gen Xers. Millinnials may enjoy a brighter future after the storm.

Left vs. right, liberal vs. conservative, Democrat vs. Republican are all false dichotomies.The real fight today is Elites vs. Us.

China is crashing.

Greece is out of control.

Buckle up. We live in a world more fragile than it’s ever been. And fragile things break.

There are so many fragile things, after all. People break so easily, and so do dreams and hearts.

― Neil Gaiman, Fragile Things: Short Fictions and Wonders

_Feature image by djoe clipped from https://djoe.deviantart.com/art/Human-fragility-21891471_