So what is it going to take to “fix” the debt mess the world finds itself in today? Well, first of all, there really is no “fix” because the debt problem is just way, way too huge. According to the Bank of International Settlements, the debt ball in the world today is $600 trillion. I wrote about this financial phenomenon in a post last year called “Can The Financial System Really Be Fixed? Some Say No.”
This debt ball is made up of complicated financial instruments called derivatives. There are plenty of these instruments in places like Greece and around the world. These are private debt contracts between individual parties. There is no public market for derivatives. That means there are no rules, regulations or guarantees. Without a public market, there is no way to objectively price this ball of financial crap. Bob Moriarty of 321gold.com sums up the end game of this enormous mountain of debt this way, “. . . The derivatives market is going to go into a meltdown like nobody’s ever dreamed of because nobody but me and the other nine guys actually understand exactly what $600 trillion dollars is. It’s 10 times the size of the world economy, and it’s been blowing up since June 2007 when those Bears Stearns funds went under. . . . You talk about “if” we have financial collapse. I talk about “when” because no other alternative is possible. Nobody and nothing is going to stop it from happening. It is as absolute as the time and tides.” (Click here for Moriarty’s complete interview)
