The Debt Tsunami 

Imagine this scenario if you will… You are the head of a small family of 5 people, including your 3 children, you live in a small street in an average house, and drive 2 average Ford or Chevy cars. You have a normal mortgage, credit card bills, which you manage to keep on top of, just about, as both adults work in average jobs.

In this make-believe situation, one of your children, when you return home from work, reveals that they have run up a $5 million gambling debt. What is worse is that the debt is with Mr Big, the local gangster who will not send letters, but send around the heavies to kick you out of your home, take your cars and anything of value, if you don’t pay up.

In despair you go to see your best friend, who lives 2 doors down the street. To your utter dismay you discover that your slightly richer friend has been thrown under the bus by their kids, for an even more ridiculous gambling debt. Both of you sit down on the lawn and cry your eyes out, in frustration and anger that there is nothing you can do – except run away, make a violent last stand or wait for Mr Big and his goons to evict you!

Clearly this is a ridiculous scenario that is extremely unlikely in real life, except that it is a perfect metaphor for what your national government has done to your country. With the exception of a handful of countries, the same thing has happened all over the world. Governments, like the kids, have gambled the nation’s tax revenue and lost – running up debts that are so gigantic that they can never be repaid.

The level of national debt across the world was catastrophic before the 2008 crash, which resulted in more corporate debt being mopped up by governments (at the expense of tax payers, of course). So here we are again in the same situation as 2007 – Mr Big has temporarily gone away with an interim payment, but is absolutely guaranteed to return, looking for the rest of his money – knee-caps could be lost.

Sadly, most countries in the world are technically bankrupt as they owe so much money that not only can they never repay the principal loan, but they are struggling just to maintain the interest payments, while still increasing their borrowing on an ongoing basis.

If your teenage kid behaved like this they would be grounded, given a stern lecture on financial accountability and banned from access to finance until they had grown up a bit. Unfortunately, the public of the country you live is not a parent and has little or no control over the wayward behaviour of its government. To make matters worse, everyone is at it, pretty much every major government and economy is over-leveraged and just hanging on until the moment of reckoning.

As with irresponsible teenagers that expect parents to step in and clear up their mess, the governments of the world will not want to take responsibility for the imminent financial crash caused by this tsunami of debt, trillions of which is reaching maturity (pay back time). Once again, if the debt cannot be kicked down the road and deferred for another few years, it is the public (like dismayed parents) that will foot the bill.

We will foot the bill in higher taxes, loss or reduction of government services, loss of jobs, collapse of small businesses and property repossessions. To make matters worse, once again the governments will probably look to bail out the ‘too big to fail’ corporations, once more paid for by the tax payer. Once stabilised, the corporate sector will be able to mop up the casualties – a plethora of cheap domestic and commercial property, land, undervalued businesses etc.

This is exactly what happened in the aftermath of the 2008 crash. This time it is going to be much, much worse as the fundamentals are worse than they were then. While Wall Street appears strong, Main Street and the real-world fabric of society is far weaker now than back in 2008.

So what happens when it hits? Will it be so bad that the whole crazy system will collapse – ushering in the Great Reset, or will we have a nastier repeat of 2008? At this point in time it’s hard to say, but either way it is bad news for individuals who have any significant debt and/or an insecure job. Ask yourself – are you okay with getting ripped off by your government yet again? Are you okay with vulture funds buying up your street, your local businesses, your town, all for half-nothing?

This is not just a horrific tsunami that is going to hit, it is a process of depriving the public of its wealth and further enriching the top tier of society. This is, in truth, a rinse and repeat process that happened not just in 2008, but in 1989, 1973, 1929 and beyond. Are you okay with that?  Or is it time we just refused to cooperate?

Luke Eastwood is a writer, graphic designer and horticulturist, he also gained a BSc (Hons) in Business Computing Systems from City University, London. He continues to use computer technology for both work and pleasure. You can read more of his work at lukeeastwood.com Read other articles by Luke, or visit Luke's website.