Wednesday 31 August 2011

aug.31 Debt is not Sustainable

Hi - summer is over; now the reality of our decrease of 0.1% GDP and the election will wake us up to smell the roses. Our reality is that we, that is the baby boomers, have enjoyed a huge party at the expense of our children in many ways - today I will only present the monetary, debt, that we have bequeathed to the next generations. And by the way, this is not an Ontario problem, or Canadian problem but a world wide problem for all Westernized democracies; we have all lived beyond our means. Let's start by asking; when and why did this all start?
We have to go back to the 1970's when two coupled events conspired to put an end to the "real" post war boon; the Viet-Nam war whose cost encouraged R.Nixon to go off the Gold Standard in 1973 and allow funny money, Peak Oil in the US in 1971 coupled with the Arab Oil embargo in 1973 caused by the US support of Israel in the Yom Kippur war of the same year. Until then US and all western debt was miniscule but after these events grew, until today, exponentially.
Now we are stuck. To see how badly read this article from The Telegraph from today titled