Excited Delirium

Stories about Excited Delirium, the Shock Economy and a little fiction here and there.

Daily Archives: January 31, 2009

Just the EARLY Stages of Financial Collapse

Hi folks,

For those of you in the crowd who are MA in Economics, I’ll remind you that we’re just at the beginning of financial collapse.  Shoving your finger, gloves, basketballs, bumpers, old tires, bins full of clothes from Goodwill and even elephants won’t stop the damn from breaking.

I know … it’s a little gloomy, but I don’t feel like I’m being alarmist AT ALL.

This article outlines the facts that back up the notion that, as the song says, ‘we’ve only just begun’.

This is not gloom and doom…. This is reality and the truth. The financial system will not stabilize. It is being deliberately changed. The Treasury is crowding out corporate borrowers in their quest for liquidity, as corporations rush to raise what funds they can to allow them to keep functioning and so that they won’t be absorbed by an elitist mega-company of our new corporatist state. At the same time municipalities are raising all the money they can to keep from going under having far overextended themselves.

I think the punch line of the article is this:  by putting ourselves so substantially in hock to the organizations that will squueze every penny they can from us in terms of interest rates and tight credit, we are surrendering more and more of our freedom (yes, freedom) as we continue down the path of blindly bailing out this company after that.

Save up, pay off and walk away from temptation when you’re out shopping because the only people that will survive this are those who are not spending.

World Debt

I know I’m a little stale with posting comment on this article (I’m trying to catch up on a number of things, blogging being one of them), but I still wanted to post this for the community that follow Excited Delirium.

I’m a visual person and I found this graphic (warning:  PDF) and summary of creditors and debtors to be the most compelling piece of information associated with this article.

Quickly, the list of debtors are the following:  North America, South America (except Venezuela), Central America, Australia, the Caribbean (except Trinidad & Tobago), Europe (except Luxembourg and Ireland), and most of Asia and Africa.  Summary:  most of the ‘developed’ countries of the world.

With the exemption of a couple of obvious lenders (eg. Luxembourg), the countries that are net creditors seem to fall into three categories:

  • Social democracy (eg. Norway)
  • Dictatorship
  • Oil country (eg. UAE, Oman)

I’m not sure if I’m concerned or inspired by this information.

On one hand, it’s the socialist countries that seem to be doing the best job of pulling themselves out of the debt trap.  They’ve avoided making themselves whores to the lenders of the world, creating a sense of autonomy, and are making efforts to move forward into the future.

Those countries are few.

The more abundant lenders are unstable economies with leaders who have questionable ethics and moral centres.  Are these really the people we want to be indebted to?