We know S & P have downgraded the US to AA+. This is a big deal for not very complex reasons far too hard for our highly schooled populace to understand. The US has been bankrupted before by war (Vietnam), refusing to pay Britain £300 million in gold under Nixon (France got it’s gold) when we worried what might happen to the USD. If the dollar collapses now, we lose the world’d reserve currency and the Yanks lose what has effectively been a free loan from the rest of the world. The last country put in this position, more or less, was Nazi Germany, which had borrowed its way to re-armament and full employment.
The price of fish question is what the most heavily armed country in the world will do if we pull the plug on its finances. In years gone by, Britain performed the US role and we have shrunk our military to an irrelevance. The US could do the same and go to an insular self-sufficiency (protectionism). The USA is still, whatever happens, a very rich country in terms of agriculture, natural resources and ability. Only morons could screw it up – but they have plenty of them and the Tea Party. Bachman sounds enough like Batman for most Republicans to vote for her and I could see her going down the war route. Who with I’m not sure, but Iran is favourite. They have her surrounded and under siege – including sanctions on her oil.
While we might see problems in credit because the US Treasury Bond is the root of much of it in the banking system, the worst case is that liquidity will dry up and no one will be able to pay financial bills, margin accounts and so on – this will lead to shares being sold in fire sale conditions and we’ll slump. If I could wish it so, along with a world-wide revolt against the rich, I would. The question, sadly, is what interests might want a slump and depression and whether they have been taking positions to benefit from such. I believe there is a grouping who want to buy up the world on the cheap. They are as dangerous as any Nazis, fascists and personality-cult communists we have ever seen (all these forms shared the millennial ‘wonder leader will lead us to heaven’ lunacy). I’m not sure who they are and have no inside information on them.
G7 has no idea of what is going on. The people there are so far removed from our interests (in the sense of me an my mates down the pub or you and yours) that they couldn’t give a damn – they know we are worthless unless we riot. The people there would struggle to pass any science A levels and yet pose as intellectual worthies who understand economics and the ‘real world’ – yet would not last long in working communities or fare well in stuff like Army Officer testing if stripped of their ‘identity’. History, away from hagiography, shows most of these votaries to be useless, self-interested turds (Lloyd George, Teddy Roosevelt, Kinnoch), sociopaths (Hitler, Genghis, Stalin, Mao) or narcissist lunatics (Churchill, Blair, Brown, Thatcher, Cameron, Clinton) and not people safe to leave your daughters with. So don’t expect anything from them.
The question is whether the hidden groups who want depression and have already bet on it are smarter than G7 types – my guess is this is a non-starter at Ladbrookes. The standard bets on a crash are in place – countries have been buying and hoarding gold (China, India) and the price per ounce along with silver is way up, land is being bought (often with Enclosure tactics to rid it of economically under-productive people) along with food production and the public sector is under threat of being sold off (suggesting some bastards have been planning to buy it – a strange position for thrusting capitalists to want to take until you look at the oligarchies running the US health care system at vast expense.
The notion of Britain as a safe have because we have done the austerity thing being plied by Vince Cable (once a man of integrity) is bull. Britain is liable to domino collapse if other countries fail – our banking snouts are in the troughs of debt in Greece, Ireland, the USA, Italy and more – all thanks to pass-the -parcel techniques of re-insurance that were once just a bet with our money we didn’t know about.
Real answers to this problem world-wide include getting rid of the debts through jubilee and redistributing wealth on a large scale so we can invest in self-sustaining forms of work and a guaranteed quality of life. G7 won’t do any of this. I’d just ask if you have thought that these grand bodies seem to want us to live in fear. If we don’t do austerity, then our country will crash. If we don’t do what the boss says the company will crash. If we don’t understand these special people need 1000 times more money to motivate them than the rest of us … we’ve been had.