In the Congo, timber sales have fallen to disastrous levels. In the United States, banks are failing, auto manufacturers are shakier than a cat in a room full of rocking chairs, and the retail market is so unstable that this “Holiday Season” may be over before it really begins. Around the world, debt crisis, bank failure and unsustainable debt is turning economies on their heads, making a mockery out of what people thought they knew about investment, about the economy and about the stability of the American economic system.
One analyst, more aggressive than most, says this current crisis is but the calumniation of a series of debt crises which began in the Third World in the 1970’s.
What I can’t help seeing is a relentless migration of ‘debt crises’ from the ‘Third World’ (primarily Africa and Latin America) in the 1970s and 1980s, via the ‘Second World’ (primarily the former Soviet Union, Japan and Southeast Asia) in the 1980s and 1990s to the ‘First World’ (primarily Europe and the US) in the 2000s and beyond. (David Ransom, First World Debt Crisis)
As far as the current debacle is concerned, as early as 2003, some economists were pointing to a probable collapse of US and British economies. In a system where consumers consumed ad infinitum, it was only a matter of time before they generated an unsustainable debt load, and the whole system came crashing down like a deck of cards.
“Gullible consumers, acting as heroically as Atlas once did, are holding up the US and UK economies by dutifully borrowing and spending. But take-home pay is falling in the UK, and unemployment is up in the US, so consumers will soon buckle under the strain of single-handedly propping up these economies. As we live in a deflationary era, the burden of debt will be much more painful than it was say, during the aftermath of the Lawson boom.” (IMMINENT FIRST WORLD DEBT CRISIS WORSE THAN ‘THIRD WORLD, 2003. New Economics Foundation)
Already in deep trouble, unable to repay their debts, many Third World countries are sliding further into the abyss, as exports tumble and their former customers—industrialized countries, face economic catastrophe. Many say the West’s long ride to economic supremacy has come to an end, along with the world, as we know it.
Even as industrialized countries get a taste of what the Third World has faced for decades, Third World countries continue to struggle to repay debt to hostile international banking entities. Around the world, exports have fallen, crippling the ability of many Third World to repay their loans, increasing their debt, saddling them with crippling debt which many will never be able to repay.
Now, world debt has taken on a new guise, as faltering economies, failing banks, plummeting real estate values, a shrinking manufacturing sector and skyrocketing business bankruptcy threaten the very core of Western capitalism. In the greatest irony of all time, Western economies, the US in particular, are depending on a historic communist enemy to bail their economies out and forestall depression.