There’s a very good graphic on the front page of the Guardian newspaper today.
Amid the ongoing Greek crisis and any-minute-now pending implosion, the Guardian provides a few pertinent statistics:
– 25% drop in Gross Domestic Product
– 28% reduction of public employees
– 28.5% drop in food consumption
– 61% drop in average pension
– 45% of pensioners living below poverty line
– 26% unemployment, 50% for those under 25 years of age
When the bad financial news hit the world in 2008 Greece had a debt to GDP ratio of about 113%. That’s around where the US is right now, although with the monkey numbers all these countries use it’s hard to know how bad things really are. Safe to assume it’s worse than the politicians report. (The UK recently decided to include prostitution and illegal drug trafficking as part of its GDP as a way to make its economy look better. “Great news! Prostitution is up 18% year on year!”)
So Greece was at 113% debt to GDP in 2008 and seven years later the country is maybe around 180% (again, monkey numbers are about all we have.) And seven years later individual Greeks are dealing with the situation in the bullet points, above. Things like, “You know that pension we promised you? Well, now you get 40 cents on the dollar. Maybe.”
Right now the US has Debt/GDB of around 105%, pretty close to where Greece was seven years ago. Try to imagine what life would be like in the US if it follows the same trajectory as Greece. It’s tempting to say it just won’t happen because the US can print it’s own money and it will continue to use its military to force other countries to do things that benefit the US. But, Spain is set to follow Greece. So is Italy. So is Portugal. When those dominoes start to fall it makes matters a lot worse.
On top of all that, Japan is north of 200% Debt/GDP and is a ticking clock, not to say bomb.
Hey, it’s nothing new for a fiat paper currency to lose all of its value. In fact, eventually they all do. But historically it’s one at a time, here and there around the world. But the dollar, euro, yen and pound represent 70% of the world’s economy. And they are all in very serious trouble simultaneously.
What happens when those dominoes fall? What happens when Americans, who own 300-million firearms, are asked to personally suck up the above bullet points?
More to the point, what happens to you?