Who is not in fiscal disaster ?

Christopher Laird : Who is not in fiscal disaster ?  
Japan is a fiscal disaster. The US is a fiscal disaster. The UK is a fiscal disaster. The EU is a fiscal disaster. All of these bond markets will be next on the firing line, after the EU mess deconstructs into chaos. We already have partial paralysis in the EU and chaos in Greece fighting the cutbacks of the public sector. The Unions are paralyzing the efforts to stem the fatal Greek fiscal situation, which is impossible to fix with cuts. The cuts needed are too large to tolerate.

The whole world that we know is turning upside down. The only thing that prevented two - yes two - world banking collapses and bank holidays was an unlimited US Fed checkbook. And the US is the last bastion of credit salvation for countries in fiscal chaos. I have no doubt the US will be central in any final bailout plans for Greece and Spain and whomever else. But the US cannot bail out every market under the sun.

The only solution anyone is willing to try is more public borrowing. That is not working and will only result in much higher taxes in two years across the world. The public will not tolerate budget cuts either in the US, in the UK, in Japan, in China, and especially in the weaker EU club med economies. Our entire world order is changing for the worse, and is again reaching a crisis stage. One or more of the above building crises will pop in 2010 and it will be 'Oh no, here we go again!'. The others will follow in the next two years.

2010 certainly will go down as a final chapter before all hell breaks loose around the world. And, when the bond markets finally rebel on the last big borrowers who can still get money (the US and others), everything ends badly.

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