The upcoming Global Simultaneous Default (and resulting economic crash)
It's no secret that with the corona virus pandemic and the resulting economic lock-downs that there are going to be severe economic repercussions. While major corporations had made record profits, small businesses are falling apart, in some cases deliberately shut down by the government (nail salons must shut down but large stores are allowed to run without impunity despite getting much more raw foot traffic and thus being more likely to spread covid-19), and the implications of this have not been fully felt yet. Small businesses are needed to buy and distribute products making corporations dependent on them for part of their wealth, and the middle class in general who has been hurt most by these shut downs is needed to purchase products from such large businesses in the first place, and thus these losses while immediately damaging to the business owning class will set in for the whole economy without their input shortly as will the loss of much of the middle class backbone of the U.S. People can only cut in to their savings or welfare checks for so long, before their lost jobs and money finally hit the economy and people stop panic buying goods and instead save what little they have left. It's likely that the government will hand out checks to people to keep this at bay, but this only furthers the inflation. Furthermore, with people fleeing to other countries, states, cities and areas, certain areas are destined to have incredible economic crashes while others have a boon. Predicting an upcoming economic crash after the corona virus pandemic is no feat of tremendous foresight, and could be seen as almost as the equivalent difficulty to hearing thunder or seeing lightning. Frankly, it's only a matter of time before something snaps.
However, what is seldom talked about is the upcoming Global Simultaneous Default, or Defaulting to pay back loans by most major world government and the planned, albeit it poorly named, "Economic reset". Economies cannot reset, and debt cannot be erased, it can only be shifted and money stolen, money that won't exist to take from other countries after every country crashes simultaneously. In the attempts to pay this off, it is very likely China will buy out the debt to Europe, and massive levels of inflation, possibly hyper inflation, will ensue. Years before the corona virus pandemic, most European and western countries had taken out enormous loans to pay for massive welfare programs they seemingly had no intention to pay back. Either hubris or lack of concern over potential economic pitfalls, Europe allowed themselves to get in to an incredible amount of debt needlessly, a fact I covered previously in 2019, and predicted that, if combined with a major global catastrophe, could spell the economic destruction of Europe. For a brief run-down during 2019, not after the corona virus pandemic but before it, Luxembourg had nearly 7 million dollars in debt per citizen (yes, million), which was 6300% of their GDP. The Netherlands had 265,000 dollars in debt per person, at around 522% of their GDP. The UK had 127,000 dollars in debt per person, which was 313% of their GDP. Greece had 240%, Belgium 265%, Switzerland 269%, France 213%, Finland 196%, and the list goes on. The U.S., which by comparison was in the most debt it had ever been at the time, had 115% of their GDP in debt per citizen, or around 60,000 per person.
What makes matters particularly daunting is that while the debt has been mounting in Europe, the GDP has been falling. Virtually every country in Europe has seen a fall in GDP per capita, or how much each citizen has and their resulting tax payments, and with the value of the Euro collapsing combined with it's ever increasing and expanding debt as well as nightmarish economic policies that have in 10 short years almost completely turned around some of the most successful countries in Europe, it's hard not to see the frightening potential for a rapid economic crash in Europe and the inevitable results of a European economic crash. This is not even including the yet-to-be calculated financial problems of the Corona virus after 2019. While the U.S. and UK used to have the same GDP per capita, in 10 years the UK has gone from 50,000 to about 40,000, and the U.S. from 50,000 to 60,000, giving us 50% more money than the UK. Norway has dropped from about 100,000 per citizen to 75,000 per citizen. In comparison to the dollar, the Euro has dropped in value by roughly 40% in the same time frame, which is quite a bit of inflation to have. The western world contains most of the world's wealth and income, and Europe makes more than entire continents combined, such as Africa or South America representing billions of people, or parts of Asia, making them an incredibly important economic hub. Without their presence much of the world will suffer as well, as will the U.S., and it is unlikely anyone has the money to actually bail them out. With no country large enough to do so other than likely China, who has profited in the pandemic, it is very likely Europe will become indebted to China, and thus become virtual slaves to their whims, such as social credit scores (methods to judge citizens behavior), withdrawing from military conflicts which oppose their allies, or simply being forced to suck up to China despite their obvious human rights violations. Perhaps worst of all will be the continuation of China's human right's violation and growing power over the world with few western countries willing or able to fight them in an economic crash.
It's difficult to stress how much debt Europe is in, given it is largely first world countries that no-one can pay back the money from. When there is no-one left to borrow from, as these countries are the primary lenders, they are destined to collapse, especially if all of them begin to default simultaneously, and thus no country can back the other up. There is a loose network in the western world that allows for bail outs in a time of crisis (Iceland for example had 11 times it's GDP per capita in debt absorbed largely by the U.S. during it's financial collapse), but if too large of a country or too many fall apart at the same time, then it will become impossible to bail them all or even perhaps any of them out, at least without relying on China. Thus the term I would use is a "Global Simultaneous Default" that would crash the system, where every country defaults on repaying their loans all at once. That Europe was allowed to get themselves in to this much debt at all is incredible and fantastical, and akin to allowing an enemy army to invade, by allowing themselves to simply just print money from thin air, through incredible financial malpractices such as quantative easing or similiar programs, where the debt is simply ignored leading to what will eventually be inflation. European countries are effectively borrowing from each other without any real intention to back up the money they are borrowing. There is little from whom to borrow money from given the size of the European economy other than itself, and European countries are largely indebted to each other for money they don't have. So for example if a European country were to borrow 300% of it's GDP from another country that borrows 300% from itself, both are essentially loaning out money they don't have, and thus creating an artificial market bubble that is bound to pop. They are creating value where there is none through overloaning money, and thus as both countries are in incredible amounts of debt, both are essentially creating money for the other to use, which will eventually lead to inflation. A government that has it's entire economy's GDP worth in debt is in so much debt it likely will not ever be able to pay it back, and a government far beyond this is almost doomed for collapse especially if it's GDP is falling, thus making it virtually impossible they'll ever be able to pay it back. So, how much debt is Europe in?
Obviously in the modern year it's increased dramatically due to the Corona virus and is still changing and currently known where it will end; all governments have been deficit spending due to the lack of economic activity and need for more government welfare. The U.S.'s debt to GDP ratio has increased dramatically for example, as we spent nearly 9 trillion dollars, or half our debt out of roughly 20 trillion dollars, in a single year, the most we have spent ever in history, and proportionately perhaps even more than during WWII. This has put the U.S. in debt nearly 185% of it's GDP, or, 1.85 times more in debt than it's entire economy. It may take generations to pay this back, as even if 100% of our taxes went to paying this debt, of which we still need money to pay for government programs and still are getting in to debt, and our economy is still not back on track thus generating even less tax revenue, it would take nearly 10-12 years. Considering how much is spent each year and that we are still getting in to debt, it may take decades to still never be able to pay it back, which means defaulting, which means inflation. Back in 2017-2018 however, Europe was already in far more debt than this.
The U.S. at the time, which by comparison still had the most debt it had ever been in, had only 115% of their GDP in debt per citizen, or around 60,000 per person. This is the amount of external debt owed to other countries and entities outside the country, and Public debt similarly is very high in these countries as well. Most European countries were at or above the U.S. pandemic levels of spending before the corona virus pandemic, in debt more than they likely ever could pay off in a lifetime. Now, it is at even higher levels, with the total figures still unknown. It's no wonder that these countries are calling for a reset, however, it is the countries and people who did not recklessly spend who will effectively have to pay for it, rather than the one's who got in to the debt in the first place. What they are going to call for is effectively mass robbery, to attempt to "reset" the debt, which is impossible, and will mean taking from others to pay for their own debt. This likely means you in some form or another, in ways that can't be avoided. Banks will collapse thus taking your money, hyper inflation will ensue thus halving the value of your money meaning even if you saved, it will be worth half or a third as much, if not less, thus effectively robbing you of your hard earned money. If your money is made to be worth less in order to pay for their debt, it's effectively the same as stealing your money, and if they halve the value of your money, they are essentially stealing half your money or more. If they default on their loans and entire industries crash and you get laid off and lose your job, you will suffer from this even if you saved and were smart and responsible in spending. If the banks start trying to repossess your home or car under the slightest of errors to crack down on people in order to pay their own debts, you will suffer even if you always made your payments on time. While it will be their fault, they will try to steal from you to pay for it, and it will be in many ways completely legal. This will result in mass robbery of the highest level, the robbery of value from an entire economy, and it will be completely legalized or done through trickery. And it will only spiral down from there. China, at some point, is likely to swoop in to try and buy off the debt of these countries they still will be unable to pay even with these draconian economy crashing measures, and thus effectively buy the loyalty of entire countries now dependent on them for their own survival, but likely only after a controlled collapse has already occurred.
The sad truth is, there are winners and losers to inflation. Those with large amounts of assets, such as gold, land, stocks, bonds, oil, or anything which may go up in value with inflation, will actually have an increase in the relative value of their commodities, while normal ordinary citizens without large gold bars to fall back on, will see the prices of everything, from oil, to food, to cars, to housing, actually go up. This means the average citizen will have everything in their lives become more expensive, while organizations or people with large gold and land reserves, such as banks or the incredibly wealthy, will actually see an increase in how much money they have. Printing money which leads to inflation is enticing for the rich, and for whatever reason or cause it happens, it actually is good for these people, and our economic enemies who may wish to buy our products are far reduced prices relative to their own currency. Our foreign enemies such as China and the ultra-rich may profit, but most of us will see everything become more expensive. Periods of mass inflation are a rare time when the rich can effectively profit off of the suffering of the poor. This is of course not sustainable long term, which is why the Weimar Republic and others have effectively crashed, but turning on and off inflation is difficult and like playing with fire, such endeavors have a tendency to get out of control. Thus in their pursuit of endless greed, it's possible those in control of these events may quickly lose control in part due to their own hubris; in other words, we can't expect them to have a reasonable shut off valve or to respond in time to prevent a major catastrophe.
What's more is, there didn't seem to be an end in sight or a path to pay it off, even under ideal conditions, which these are not. While the U.S. economy had improved dramatically in pre-Covid years, Europe as a whole was falling dramatically. The GDP per capita in Europe from 2008 to 2018 was falling in most countries, especially in the richest countries, and only in 2018-2019 did it improve slightly, to be completely tarnished by the Covid-19 pandemic. For example, Norway, one of the richest countries in Europe, which used to make 100,000 per person, had fallen to only 75,000 a year, marginally above the U.S. in 2018 at 65,000 a year, while the UK, once at our level of 50,000, has in the same time frame fallen to 40,000, at one point making equal money to the U.S. and then making 50% less, which is not insubstantial. While the U.S. GDP per capita at the time was roughly 65,000 per person, Spain and Italy hovered around 30,000 per person, with greece at 20,000, and even Finland, a Scandinavian country, at approximately 40,000 a year, far below switzerland or Norway which used to hover around 100,000 per person per year. Most European countries made far less money than one might perceive them as having made, being much more poorly off than they had for nearly half a century. Further, the standard of living in the U.S. was also substantially higher; studies [1] found that in the same time period, the U.S. standard of living was higher for the average person in poverty in the U.S. than the middle class in Europe, meaning it was not only raw numbers, but in how people lived as well. Goods are typically cheaper in the U.S. than Europe, with burgers, milk, gasoline and other commonly available goods being much cheaper, housing especially so (at 3-4 times lower prices for the same square feet of space), and thus not only did Americans have more money, but they got more for their money as well.
It's no secret Greece was falling apart, but it's likely not known that Spain, Italy, France, Sweden and other were going through similiar periods of unrest. Just for comparison, to the U.S. at 65,000 a year, Slovenia, Estonia, Portugal, made around 25,000 a year, while Latvia, Hungary, Poland and Croatia made around 15,000, with Romania and Croatia at 12,000, and Serbia, Montenegro, Bulgaria, Bosnia and Albania 5,000 to 10,000, with Albania making just 5,000. This is in comparison to the 65,000 of the U.S., which is 13 times higher than Albania and 2-3 times higher than much of Europe. Despite the enormous amounts of debt, most of these countries had been losing money, and thus were nowhere near U.S. levels. It's not just that these countries are in debt, but that their GDP per capita was falling as well, meaning their economies were not improving and they would have no way to pay off this debt one accrued. Part of this is due to massive unemployment figures; despite "unemployment" figures being quoted as being low, real employment figures went down by about a third. Countries with nearly 50% employment dropped to 30%, including Denmark and many Scandinavian countries, and reports showed that 50-70% of people under the age of 30 in many of these countries were unemployed. Many had never held a job for the last 10 years, and not only were living off the government welfare, but were not developing job skills and becoming depressed and lethargic as a result. This problem has only gotten worse, and with the pandemic has been stretched to it's limit. When the drop in money, overspending and lack of economic involvement is considered, it was inevitable that Europe and most the western world was heading towards a financial collapse; with the absolutely devastating response to the Covid-19 pandemic, it seems like the world is headed towards a global collapse of such magnitude it's almost unfathomable to think of the consequences. It's hard not to think of a reason why so many are pushing for a "great reset" in an attempt to reset debt, and were doing so a decade prior, which is impossible to actually do in real life and would be a catastrophe in it's own right. Either the world faces an economic crisis of unimaginable proportions soon, reminiscent of the Great Depression in the U.S. or Weimar Germany in Europe, or finds some way to avoid a total collapse, but in either case we are looking a catastrophe that was long in the making and now largely unavoidable.
