Financial Crisis

The odds of a financial crisis are almost inevitable if a person was to come out of denial about the gross mismanagement that has been going on in the OECD world in recent decades.
Democratically elected Governments have been completely blind sighted by the short term view and have assumed almost arrogantly that “this time it is different” or "the free market will save the day". They have allowed all manner of borrowing to get out of hand and forgotten the golden rule: Always have some money set aside in case of a rainy day. Now that the rainy day has come, where is all this money going to come from? The answers are all pretty much the same…

Either borrow more (no longer a realistic option for many), print more money (never overly sensible) or the more likely option of slashing budgets. Slashing budgets is hardly going to do wonders for the morale of the workers. Of course a government can default on its debt obligations...

Unfortunately slashing budgets in the 21st century is not the same thing as slashing budgets in the 20th century. Workers may have revolted in the 20th century at such ideas, but by and large societies back then were much more respectful of authority and just went along with what had to be done. This subservient mentality is fast disappearing with the onset of the baby boomers nearing retirement whose mentality is more akin to entitlement than sacrifice. The young of today have only known the good times. Faced with the prospect of decades of hardship they are likely to revolt big time as such prospects. Perhaps this is the one point that many of those in authority have somewhat overlooked. A financial crisis is one thing. A complete collapse of the underlying structure of society is another thing altogether.

The solution is simple in many ways. Avoid a financial crisis by acknowledging up front that the previous few decades have been a huge experiment with filial currencies. History has shown us the benefits of the boom times, but alas the bust times can be highly destructive. Oh well. Lets all sigh a big relief that nothing about money should be taken too seriously since it is only created out of thin air in the first place.

Why not just wipe the debt slate clean by every government defaulting on its debt en mass? After all, we are all pretty much in the same boat in the OECD. I am sure countries like China would understand and forgive our mistaken "capitalist" experiment that only requires some minor tweaking.