I for my part starting to thinking that this is impossible. There’s a limit to seize in everything. I even will start betting on “too big to survive” instead.
Why do I think that… Well look at the US, the government has grown bigger every day since the 2nd world war and more and more goes through government hands. And states do not “produce” anything they are just “consuming” so more and more things are getting consumed by the ever increasing government. As we can see the government has consumed not just what they have stolen, but also what they have “borrowed”. And this now is simply “too” much, to large the debts not to fail. In short too large to survive.
The states in the EURO zone face a similar problem. The governments in every country have grown and the EU bureaucracy. So in a way there’s a level more too “consume” and not to produce.
Nearly all the EU states have too much debt. Now they want to cure the problems caused by seize with inflating the seize even more. In the whole history of nature and mankind. Nothing could grow beyond some limit. Just look back to dinosaurs. They grow bigger every generation and suddenly they collapsed and “vanished”. Every empire was destroyed AFTER it has out-grown a size which was survivable.
Nature also tells us there is alway scarcity. Lions can not survive without enough prey. The prey can not survive without enough grass. Grass can not survive without enough rain and sun. Governments can only survive with enough support from the population. There is a point of no-return where the population simply does not support government any longer. Even the most inhuman government can not fight all of their population. (All is way too much but I can’t tell where the limit is)
Check the big empires they all extend and extend and extend and finally collapsed. This is what happens if things are getting too big. Governments world-wide are way too big to survive, so are large corporations. Yes they will rule and yes they will make our life on earth hell. But finally they will break down.
Nobody know when things really got too big or start to tumble. So take this with some tons of salt. It seems the debt spiral has turned into a death sprial. You can see the time-spans where new even higher (and IMHO more absurd) figurers are mentioned. See e.g here in Euro land the costs on “saving” .. whomever. It has started with around 300 billions. and now with new leverages we’re talking about 2 trillions. This increase just happened in a year. Do you remember Paulson, he wanted to start with 750 billions and now we are way beyond a few trillions. This raise has happened in just 3 years. So you see the nearer we come to the present the higher the figures. With rates of growth well beyond 1000% a year. In the case of the EU we have a raise of roughly 1.7 trillions that is an increas from 1.4 / 0.3 = 466,67 %. Still it does not even cover all the debt just the debt of a state like Italy. Now unfortunately there is also Spain, Portugal, Fraance and last but not least Germany. ….. If we just look at the debts of the biggest countries in Euro land we are talking about 7- 10 trillions of debt. And well the less likely it will be that they will pay their debts. So no EUR land will not survive in that form simple because it has outgrown it’s seize of survival
Either the US or the EUro countries will break down, before I bet we see some other developing countries to face their doom. Too much money from EUR countries and US countries was put there. If they start contracting to pay their obligations, those countries will be without a chance. But it does no help. Assume that Greece will default on their debts, then this debts are simply gone. And one of the other bank will face deep troubles (Currently it seems the french banks are quite high exposed to risks resulting on Greek) It could be no surprise that Sarkozy tries massivly to find new lender. I guess he knows all too well how dire the french situation really is. The unemployment rate is especially high among the younger one, and central planning does it’s best to be as inefficient as possible. And yes it’s not a surprise that the EZB has bought securities from the PIG states, they know without it they would be gone.
Germany has it’s own massive problems which still are unsolved. The pension promises e.g are simply terrible high and covered by anything. The taxes can be well over 50% and that’s unbearable.
So I extend my predictions with that: Within the next five years the EUR zone will not exist in it’s current shape.
The near future predictions are difficult because we do not now what will be faster the contraction of the economy or the printing of money. If we assume that contraction will prevail we should see falling stocks, falling gold till the printing press will win. After that we will see higher inflation. I predicted around 5 % within the next 3 or so years. It could be that this will take a little bit longer (but then the inflation will raise well beyond 5-7 %. That will be the last thing we remember while seeing the current governments and states collapsing. Simply because of “TOO BIG TO SURVIVE”
After that who knows?