RE:RE:RE:RE:RE:Interest RatesAlvarez,
Excessive debt is a global phenomenon. In China, debt is estimated at 400% GDP. That includes the vast shadow banking network. This is much higher than the USA. Does this mean global markets must collapse under a mountain of debt? Not necessarily; currencies can simply devalue. That’s what Italy and France used to do regularly before they joined the Euro. And unlike the thoroughly inflexible Euro, everyone still kept their job. Anyone who lived through the 60’s and 70’s, has experienced strong currency devaluation. The real solution is simply to slash government spending to sustainable levels.
That’s not the whole story, however. Countries like India, Thailand and Vietnam continue their own rapid economic expansion. The world doesn’t stop turning when one or two nations experience setbacks. Global economic expansion flows like water, filling every possible crevice. The real economy is fueled by enormous quantities of raw materials IVN will be there to satisfy that unquenchabke thirst for decades to come.