In an eye opening article in Whiskey and Gunpowder Egon von Greyerz says "We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion" . Clueless governments...will continue to prescribe the same remedy that caused the problem in the first place, namely more credit and more printed money.."
The chart below shows debt as a percentage of GDP for various OECD countries." Egon continues. "The official debts (in red) are massive and unlikely to ever be repaid in real money. Total debts (grey bars) include unfunded liabilities such as pensions and health care. Spain has the lowest total debt to GDP of 250%. Germany and the UK have around 400%, the US around 500% and Greece over 800% debt to GDP. These figures are absolutely astronomical and prove that most governments in the world will be totally incapable of repaying their debts or funding their future pension and medical care liabilities."
If these countries were businesses they would now be bankrupt.
"Never in history," Egon insists, "has the world been in a situation when virtually all industrialized countries are bankrupt. Therefore there is no precedent for what will happen in the next few years. What we can be quite certain about is that events will happen in a seemingly random pattern and that it will be impossible to forecast where the next crises will start.
