July 19, 2012

JAMES DELINGPOLE: Red Pill, Blue Pill. “Let me give you an example of what taking the red pill entails. It’s a report from last year by the Boston Consulting Group showing that the amount of household, corporate and government debt which needs to be eliminated stands at $21 trillion. The cost of dealing with this ‘debt overhang’ will entail the loss (ie confiscation by the government) of one third of the wealth of the asset-owning classes. Some time in the next few months, weeks or years, we’re all going to be taking a 30 per cent hair cut.” Well, the asset-owners, anyway.

Related: What’s In A Name? “Recent events have shown that not only banks and insurance companies with their presumed ‘money good’ guarantees, but sovereign nations as well cannot all be counted on to guarantee a return of principal, let alone a return on investment that comes anywhere close to matching 7% in nominal terms. What does Greece tell us if not that money, credit and financial investments dependent on ever expanding growth of credit are sometimes subject to buzz cut defaults with scalp level clippers, as opposed to a trimming of the bangs with haute couture scissors.”

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