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Debt Crisis in The Third World

October 16, 2011 4 comments

The West is nearly US$100 trillion in debt and 14% of global population. Emerging Markets and Third World has 80% of global population and gets less than US$10 trillion of funding.

Cartoon by Bendib. Click for larger image.

Cartoon by Bendib. Click for larger image.

The Debt Crisis: An Overview

Modern day international usury is, of course, much more complex than the more primitive relation we have just presented. Total Third World debt amounts to USD2 trillion; annual payments is about USD 200million. The system of debts has evolved into a key aspect of the capitalist economy; a weapon for consolidating the domination of the people’s of the Third World. In many ways, the debt today is a weapon more potent than others devised by colonialism and neo-colonialism.

It is institutionalized to a very high degree, is regulated by a massive bureaucracy of the multilateral finance institutions; and backed up by the military might of the mightiest nations on earth. Worse the burden of paying debts is passed on to society in general as a routinary process. (via South South Summit 1999 Document: The Development and Historical Context of the Debt Crisis).

Pareto’s Economics

The previous post examined the debt situation of the West.

Since the global financial system is a Western captive, humungous debts are arranged, serviced, cancelled, written-off, repaid – without significant discomfort. Gross debt of the West is US$ 100 trillion (State; Corporate and Household); while the States of West are debtor to the extent of US$ 30 trillion; which is nearly 40% of global GDP.

Finally, the debt problem will be managed. Many ways to skin a cat.

But …

US$2 trillion debt that is owed by the developing world will be used to extract maximum benefit – at lowest prices. Raw materials will be bought at below-low prices. Imports will be priced at exorbitantly.

The answer is …

Two-fold. At an individual level, invest and stay invested in gold. At a national level, the developing world must create a multilateral framework for a third currency.


Public debt imperils world economy

December 6, 2009 Leave a comment

Surprised at this 'perfect storm' - Don't be!

The Organisation for Economic Co-operation and Development (OECD) has warned that the world’s 30 leading industrialized economies will see their indebtedness grow to 100% of output in 2010, a near doubling from the percentage 20 years ago. (via Public debt imperils world economy – International News – livemint.com).

Till the fat lady sings

The debt spiral is not ended yet.

Like the Dubai crash shows, the world economy is not yet out of the woods. Struggling firms, in the face of a weak consumer and industrial markets, may just keel over. A domino effect may set off yet another round of closures, bankruptcies, mergers, and defaults.

More importantly, are Western Governments. With public debt (read that as Government debt) exceeding 100% of GDP for every Western Government – Ireland at more than 1000%, Britain at nearly 200%, US at more than 100%, they are the vulnerable soft-spot of the global economy.

I want more

The shopping bill for Western welfare state is not going away – except up. Welfare bills are getting more ambitious – and the domestic lobbies want more ambitious schemes. High cost economies are being protected by barriers and stockades.

Run … hide … but you can’t turn your back

The political constructs of the West have hit a wall – and there is no way but down! Since the West is busy hiding elephants in the room, the need for a different political ideology remains unaddressed.

An ideology like भारत-तंत्र Bharat-tantra.

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