G7 helpless in the face of mathematically certain bankruptcy
The leaders of the Group of Seven Industrialized Nations or G7 are
holding an emergency meeting in Germany in a futile attempt to avoid
their inevitable bankruptcy. The leaders talk about Greece, the Ukraine,
China, the Middle East and other matters as if somehow they are still
in control. The leaders need to understand that there is a thing out
there called reality and, no matter how long you try to avoid it, it has
a way of catching up to you. The fact is that, with the exceptions of
Canada, Japan and Germany, the G7 nations and their allied Western
states have been running a deficit with the rest of the world for the
past 40 years. The elephant in the room that nobody talks about is the
fact the biggest debtor of all is the Corporate United States.
The rest of the world has made a collective decision to stop financing these Western governments until they stop their constant war-mongering and resource stealing. Since the rest of the world controls most of the real money (i.e. money connected to physical objects) they control the underlying reality. You can eat bread but you cannot eat derivatives or dollar bills. You can trade real things like cars or oil for rice or wheat but if you lose trust, nobody will trade your IOUs for real things. The G7 countries, especially the Corporate United States (as opposed to the Republic of the United States), have managed to postpone the inevitable with fraudulent economic data, offshore slush funds, and derivatives theoretically worth astronomical amounts.
However, no amount of zeroes added to astronomical numbers inside Western banks will make any difference so long as these zeroes have no connection to the real world.
The Chinese have insisted on payment in things, like gold, that actually exist. The American corporate government has, like a once rich junky fallen on hard times, pawned family heirlooms, borrowed from friends, stolen and lied so far to get its next fix of debt. They have stolen Iraqi oil, African gold, Japanese savings and everything else they could get their hands on. However, since real US GDP has shrunk by 21.4% since 2011, it is becoming impossible for the US Corporate government to keep paying its snowballing debts. The obvious answer is to declare bankruptcy.
The problem is that very few people are alive today who remember the last time a European country went bankrupt. No Anglo Saxon country has gone bankrupt for a thousand years so the Americans are even less familiar with what bankruptcy really entails.
For those of us who witnessed firsthand such things as the collapse of the Japanese bubble and the bankruptcy of Argentina the future is easier to see.
Let us compare these two cases to what is happening to the G7 in order to predict the future.
In the case of Japan, the bubble burst in the years 1990-1992. The Japanese government knew as early as 1992 the bad debt total was 200 trillion yen (about $2 trillion). However, public announcements then put it at only 3 or 4 trillion yen. Company A would pass on its bad debt to company B who would pass it on to company C, each with a different accounting deadline. It was like an individual using their American Express card to pay their Visa bill and then using the Visa to pay for their MasterCard and then use their MasterCard to pay off American Express. This scam bought time.
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