I want to start this discussion by emphasizing a very important contributor to our current economic crisis, namely; the dramatic rise of debt. I am of the view that in societies with developed financial markets (ie non-indigenous based societies) patterns of human behavior tend to repeat themselves over time. This is why much can be learned from reading and understanding economic history in conjunction with the cycles of human interaction. I will discuss this more as the council develops, but I wanted to leave you with a chart to ponder. The chart is of debt in the US to GDP. We are at the end of a long cycle of increasing debt with much effort being made to maintain asset prices and stimulate even more debt. Unfortunately, we have reached the point where the existing debt cannot be serviced out of income much less repaid. We must either increase incomes substantially, default on the debt,, restructure the debt radically, or create enough inflation to diminish the value of this debt over time.
We are locked in a great battle between the forces of inflation and deflation. All great debt bubbles have ended in deflation. The US government and the Federal Reserve are determined to not permit deflation to occur. This will be the major economic issue we face over the next several decades and will result in the evolution of a new values regime and hopefully the start of a new golden age of human interaction. This could also end in tragedy. The choice is ours. I will write more about this later.
Sorry--but I couldn't figure out how to attach the chart. I have a lot to learn.