IPFS News Link • Economy - Economics USA
IPFS News Link • Economy - Economics USA
Most of the
worst financial panics in history have happened in the fall. Just
recall what happened in 1929, 1987 and 2008. Well, September 2011
is about to begin and there are all kinds of signs that the financial
world is about to hit the big red panic button. Wave after wave
of bad economic news has come out of the United States recently,
and Europe is embroiled in an absolutely unprecedented debt crisis.
At this point there is a very real possibility that the euro may
not even survive. So what is causing all of this? Well, over the
last couple of decades a gigantic debt bubble has fueled a tremendous
amount of "fake prosperity" in the western world. But for a debt
bubble to keep going, the total amount of debt has to keep expanding
at an ever increasing pace. Unfortunately for the global economy,
sources of credit are starting to dry up. That is why you hear terms
like "credit crisis" and "credit crunch" thrown around so much these
days. Without enough credit to feed the monster, the debt bubble
is going to burst. At this point, virtually the entire global economy
runs on credit, so when this debt bubble bursts things could get
really, really messy.