When the current financial crisis broke it was pretty much driven by the predictable failure prime lending and dodgy financial instruments. What didn’t show up then was the corporate loan sector and few people seem to have the big collapse on the radar.
Consumer and sovereign debt are bad enough, though they are fairly transparent and quick to manifest. Corporate debt, for which we can thank those overpaid and over clever bastards who bought you the global financial disaster, is far easier to hide – for a while.
Quoting from a recent article the corporate bubble is set to start bursting soon and continue over the next three years. Sound as it is
Right now, a block east of
Times Square, the National Debt Clock is ticking: $19,000 per second, $1.1 million per minute, $66 million per hour. …the total rises to $33 trillion. As a percentage of gross domestic product, the grand total of debt outstanding, now 294 percent, exceeds the previous record of 270 percent set during the Great Depression. U.S.
Here is how it works in
Governments have already increased overall debt levels bailing out banks and some corporations. The basic reasoning is sound, retaining jobs and preventing social dislocation, as was the case with finding alternatives when the ABC learning Centres collapsed. Each of these interventions becomes a debt multiplier, so doubtless other remedies are frantically being sought.
Don’t make anything anymore
Back in the 1980s Paul Keating assured
The latest licenses issued are for potential mines on the rich black soil region of the Liverpool Plains in NSW, fertile soil fed by a massive aquifer. True the fertile soils here have been degraded by cotton farming, but rehabilitation is well under way. Coal mining will destroy both the soil and ground water, but members of the NSW government should do well from consultancies and directorships.
We need to get back to the concept of a broad based economy; one where we grow thing and make things beyond just notional money. The smart nation wasn’t so smart after all and we need to recalibrate aspirations to meet the realities.
Doubtless Rudd is doing well to drive positive sentiment, but the downside now is debate and political engagement is being stifled; sadly the great public think that is wonderful.