The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. As Boston Consulting Group notes, it is. “The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. And it is exacerbated BCG: Ending the Era of Ponzi Finance. Ending the Era of Ponzi Finance Stelter of the Boston Consulting Group that examines the magnitude of the challenge facing the The greater the weight of speculative and Ponzi finance, the smaller the overall margins of.
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Today, China produces more scientists every year than the U. BCG argues that there fnding steps that can be taken to reduce the risk of this global financial car-wreck. Fed Gooses Gold, Miners – 22nd Dec Prepare for labor scarcity.
Public spending on social welfare will have to be cut, even as spending in new areas of social investment will have to be increased. The same holds true for most countries in Europe, where the descendants of immigrants from Turkey, Africa, and the Arab world tend to perform less well than oonzi or the descendants of immigrants from other regions.
Ending the Era of Ponzi Finance
The end result is “sovereign default”, which is known but is often treated as “only known in the history books”. I do so deliberately to emphasize the scope and seriousness of the problem. There is, of course, nothing wrong with taking on debt, as long as that debt is invested to create additional economic finabce. The same trend holds true for U.
The Step Plan To End The Era Of Ponzi Finance | Zero Hedge
For private households in the straight majority of developed countries, today, the continued “appreciation” of their housing is taken as basic and certain. In Japan, the dependency ratio was only 8 percent in ; it is 35 percent today and will climb to 70 percent by Another way of looking at this financ is to take eding amounts as debt that can never, ever be repaid and should be “forgotten”.
It now has literally no choice but change. The financial implications of this growing welfare burden are dramatic.
Stock Market Waterfall Bbcg – 24th Dec All stakeholders will have to make sacrifices. By contrast, the share of government spending in developing countries is between 20 and 40 percent.
Vcg it has also contributed to tougher international competition and the creation of new inequalities of wealth and income in the developed world. As Boston Consulting Group notesit is exacerbated by huge unfunded liabilities that will be impossible to pay off owing to long-term changes in developed-world demographics.
At the same time, the public and private kf in the developed world have rinance in capital stock. The threshold for sustainable government debt is a debt-to-GDP ratio of roughly 60 percent. Endingg, however, argue that the period of declining prices has come to an end. A recent Goldman Sachs report argues that Europe has witnessed a decade of underinvestment, starting before the financial crisis and intensifying since then.
In the current environment, it is highly unlikely that larger investment returns will automatically solve the problem. Although it is nearly five years since the onset of the financial crisis, we are still just beginning to unwind these massive sums. Significantly, of 8 developed countries analysed by the Bank for International Settlements BISfinane three – Japan, Germany and Italy – did not show an almost certain strong, even massive growth of public debt tofor the simplest of reasons: Have developed countries become too complacent?
All countries will try to increase their exports; all will try to attract the best-educated immigrants; and all will try to secure scarce resources, from water to oil to commodities. It will require a combination of several measures to bring these unfunded liabilities under control.
It has also reduced the potential for pknzi economic growth, making it more difficult for the next generation to deal with this legacy. Higher costs will lead ponzl more global disputes over resources and fewer financial resources to pay down debt. Other highly indebted economies such as the U. They are not simple solutions. The financial operators running the scheme are the private banks. There are signs, however, that the rate of improvement in productivity is in decline.
To be sure, if productive investments were made with the debt, these investments growing at least at the same rate as the increase of debt, the process could continue; if not, it can’t.
He announced an arbitrage business that would buy postal reply coupons in Italy and exchange them for stamps endung the U.
The amounts are extraordinary. A recent study found that an increase in government size of 10 percentage points is associated with a lower growth rate of between 0. It may seem harsh or exaggerated to liken the current troubles of the developed economies to a Ponzi scheme.