"With government debt across the world soaring, the man who predicted the credit crunch is predicting a reckoning.
"The recent problems faced by Greece are only the tip of a sovereign-debt iceberg in many advanced economies,” Said Roubini, 27 April 2010
We know that Advance economies have been pilling up debt in the past 20 years - Finland is no exception with a blip in 1990 that just slowdown a phenomenal leveraging of the system where the debt burdened citizen was at its center and that is now shifting to states.
In the past few years, I have been asking myself, how would that end - as it is not clearly sustainable. The answer has never been clear as policy makers have always pushed the outcome - delaying and worsening the core issue and making it worse each time.
So now, not only the public but also states have unsustainable debt -especially when considering the economical outlook and retirement tsunami, when looking forward.
-Today we got a hint of what could happen-
Yet, there is a land on this planet where its citizen are either on pills or drawn into media disinformation - a kind of wonderland: Finland - just have a look to the following picture:
It is either due to an ever growing irrational , exuberhant housing bubble that makes people feel wealthy associated by historically low interest rates that reinforce the impression of wealth - and of course supported by bankers that keep on adding fuel to the fire...
So we are not far from the beginning, where reality catch up and where we will suddenly realize that the current housing "ponzi" system is based on illusion and that in any months it could reverse for years or decade to come. - Any opinion on the reverse view, please give your aguments-
And let me finish with those words taken from a speech of Jean-Claude Trichet - ECB president :
At the outset of this quest, it is worth remembering the words of the eighteenth-century Anglo-Irish philosopher, Edmund Burke: “Those who don't know history are destined to repeat it.”
... people have already forgttent the outcome the financial crisis in 1990's in Finland where fast and massive credit expansition was allowed by banks and pushed household to very high debt burden that ultimately pushed the banking sector to its knees. Borrowing in foreign currencies was also one the recipient of disasters, have a look to that particular article published in the Financial Times...