Off a discussion on The Oil Drum. I like it…

[-] Ghung on March 7, 2010 – 1:02am Permalink | Subthread | Parent | Comments top

Global debt has reached the point where it can never be repaid. With so many claims on debt of all kinds, when nations get to the point that soveriegn debt is either forgiven or defaulted on, there will be a cascade effect that will wipe out all accounts payable. This won’t be debt forgiveness. It will be a debt implosion made necessary by a fully leveraged global economy, complex credit default swaps, derivatives, and fiat currencies that are poorly supported, reaching the end of their usefulness. Credit is slave to growth, as is repayment of debt. If we have reached limits to growth, credit as we know it stops, as does debt service. We’re living on borrowed economic time (literally). How you respond to that is purely situational.

The big bills are comming due folks. Pay your most important ones while you still can.

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