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Tuesday, September 6, 2011

World on the verge of bankruptcy

Global debt grew more than twice in the past decade, the trend of borrowing continues. The entire planet owes more than he has. Every second all indebted.

Every second all the world is indebted, but the entire planet, but owes more than the income brackets.

Mankind sways under 158 trillion (thousand billion) dollars in debt. Every man on the planet owes 22,733 dollars. Every child is born with the burden of debts, which are growing faster than the growth of mankind. Debts are growing faster than gross domestic product.

Debts have more than doubled in the past decade, with 78 billion dollars in 2000 to 158 billion dollars in 2010. year, estimates the global consulting firm "Mekinsi". With 6.95 billion people on the planet, and last year's gross domestic product of 74.54 trillion dollars, the average GDP of the world is $ 10,500. This is only half of the debt each of us.

In theory, mankind is bankrupt, making it financially more vulnerable than ever in history. Prediction "Economist" suggest that next year brings another five billion dollars in major debt.

- The debt is growing faster than GDP. The ratio of global debt to GDP ratio increased from 218 percent in 2000. year to 266 last year - says "Mekinsi".

Most of the debt refers to government and financial institutions. World governments owe their citizens, a growing number in recent years reflects a worrying trend. Faster growth of debt income, as is the case in recent years, implies greater state intervention in the economy, and raising taxes in the future, predicts "The Economist". The higher government debt, the greater the risk of fiscal crisis, a crisis and thus will have a greater impact on the economy.


Meter of U.S. debt in New York's Manhattan on a street in the second screen is printed in a second amount of U.S. debt and debt of each American. Debt in the world's largest economy reached 14.62 billion dollars, which is close to U.S. GDP. This debt, according to the IMF prediction, amount to more - 103 percent of GDP in 2012. year. In the U.S., debt per capita is twice higher than at the global level and is 46,884 dollars.


Greece, Ireland, Portugal, Spain, Britain and the U.S. have already been caught in a debt trap. They try to escape by making cuts in health and pension insurance, firing thousands of workers, while the U.S. has resorted to printing money. It introduces in a big way in the global system of inflation - printing money without backing.

The United States has lent billions of dollars over the past decade, mostly from foreign investors, which helped finance two long war and the recovery of the financial system and promote economic growth, fiscal stimuli. Debt is up, so, just piled.

- America is supposed to accumulate the 204 billion dollars in debt, and now it seems every two to three years - noted American Congressman Jim Cooper.

In the U.S., the situation worsens monetary and loose fiscal policy after 2001. year. Policy of low interest rates encourage spending in the private sector and increasing indebtedness of households, while spending on the military rose from the wars in Iraq and Afghanistan. America is the exporter of capital, thus becoming its importer, vacuum about two-thirds of global savings in the period between the 2004th and 2006, which, as experts note, resulting in "global imbalances".

America, however, as an integrated economy, experts notice, despite the growing economic problems, has mechanisms that can resolve them more quickly than in the euro area. The fact that the euro area, each state still decides on its economy, and that the rules of how the budget deficit can be largely ignored, tolerated, makes the situation in this part of the world more complicated than in the U.S..

European politicians have responded to the crisis of a series of indecisive measures, which caused a negative reaction from investors in Brussels, Frankfurt and Washington. Experts commented that the response of Europe could be greater integration and centralized fiscal debt financing, and the deadline longer foreign investment, a new opening to educated immigrants. Such solutions, however, have not yet in sight, and similar historical episodes of the past taught that the healing process of a recession is not fast, even without an earthquake.

Helping the international community does not go by the fact that the extended life expectancy in most developed parts of the world, in Japan, Europe and the United States means that fewer and fewer taxpayers have to provide financial resources for a growing number of pensioners. Light output in a word, no.

The measures are, how heavy, so limited - life could be extended to 70 years, the extension of life expectancy. For the U.S. it could mean a reduction in military spending and agricultural subsidies. For Europe, the loosening of strict immigration policies because the old continent had to rely on a relatively younger population of the Mediterranean to be able to withstand the burden of pensioners.

None of these measures, however, could be called popular for world government. In the past, in such situations, governments were deciding difficult to increase taxes or cut costs.

More often than not, deciding to reduce the real value of liabilities - inflation. In a short period of rule from an average of four years, much less elected politicians are willing to resort to unpopular measures, tax increases and austerity, rather than printing money, which would eventually be able to bring them another term in the managerial chair.

The real situation is, therefore, in favor of new debt and increased the gap between rich and poor. Almost half the world population, more than three billion people earn less than two dollars a day. On the other hand, the number of millionaires has exceeded 10 million.

According to the "Merrill Lynch" and "Kapgeminija" of the richest in the world increased last, crisis, was more than eight percent to nearly 11 million. Their wealth increased by nearly ten percent, reaching 42.7 billion dollars. The global population of ultra-rich has grown even more - over ten percent, and their wealth by 11 percent.

The credit system was initially silent supporter of the reservoir basin in the hands of individuals or joint capital. Then it becomes a weapon in the fight competitors, to be transformed into a mechanism of centralization of capital. Finally, when you get closer to the point where no one can create a shield of insolvency, he turns into a headache for the government and - to trigger social unrest.


DEBT trap in which our world was established through the step by step, according to President Ellen Brown Institute of Banking. The first set was the 1971st year, when the dollar is no longer associated with the gold surface. Currencies are no longer tied to gold were left to "float" in the money market, competing with each other, which made them vulnerable to speculation and manipulation. Next occurred the 1973rd , when the OPEC countries reached agreement on the sale of oil in dollars, the price of black gold has increased significantly. To 1974. The price of oil rose 400 percent from the 1971st year, a country that is not were forced to borrow dollars from U.S. banks.

Then, in 1981. U.S. Central Bank raised interest rates to 20 percent. The debt has doubled in less than four years, with much of the world steeped in debt. To 2001. debt of developing countries has quadrupled. When would be unable to repay debts, the IMF has jumped in with loans, with special measures, which included cuts in social spending, privatization of banks, opening markets to foreign investors, "floating" currencies. Today, these measures do not impose only developing countries but also the European Union and the United States.

Top of the Pyramid

Bank for International Settlements (BIS) in Basel by the 1930th was established by banks of Belgium, France, Germany, Italy, Japan, Britain and a group of banks from the U.S., currently has 55 members and the head of the global financial pyramid, according to Professor Carroll Kigli in his book "Tragedy and Hope". April 2009. Group G 20 most developed countries agreed to the regulations set by the board whose seat is in the BIS. Although this is only the BIS guidelines, countries that do not comply follows, credit rating downgrade, which is a very high price.

Towards a global crisis BIS urged member states to increase their capital by two percent. Japanese banks have now got into a recession, while the U.S. tried to avoid the "packaging" loans into securities sold to investors. Almost everyone could get a loan, and loans are significantly enlarge. When people are no longer able to repay them, banking activities are notified and stock market fell, raising the crisis.

It spilled over into Europe. EU's response was that the member countries no longer borrow from their banks or print money, but to lend to the private international European Central Bank or the IMF. Thus, the private banks gained greater international power.

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