Certainly the economic outlook for the world is very bleak.

Having said that it should be noted that Japanese debt exceeds 200% of GDP right now. Japan of course has a strong manufacturing export industry, so has some ability to service external debt.##

China is definitely over heated - will they snap back, or will it be a slowing of growth? A snap will be nasty for every market, especially the emerging markets - and the commodity exporters which have so far been fairly insulated will get a pretty big shock.

US capacity to service debt is very dependent on the financial sector, which contributes some 40% or so of GDP - with their banks underwater and a massive credit contraction, it doesn't take a genius to realize that refinancing and monetization of debt are the only ways that the US will be able to address its debt burden. After all - how can you make money when there is no one to lend to, all your loans are non performing and you have negative equity.

So, the question is - does it even matter? Does it matter that banks that already must have negative equity go further negative? So long as the govt's are willing to keep the books closed, and accept insolvent banks - then they can continue the sham forever.

There must be further write downs and write offs by the banks - more crap has to be eliminated - if the Fed has taken its capacity in crap (which gets shuffled into Freddie and Fanny for the tax payers loss) - that is likely to still leave huge holes in bank balance sheets with commercial real estate, CDS's and more so with sovereign debts.

What if places like Greece, Italy and Dubai go the same way as Iceland and tell the banks to fk off? With all the CDS's open - one sovereign willing to flip the bird would take out most of the major banks - if they are trillions in the red, will someone have the political will to say - enough is enough?

So far it is obvious that the favored banks will be allowed to zombie along with negative equity as long as they have their agents in the positions of power.

If banks truly fail, and those losses must be realized - then we may see a new era emerge and the power brokers might actually lose everything - seems unlikely.

I think we can expect to see the banks continue to operate regardless of being insolvent - and keep draining public funds as a matter of course - and still failing to lend.

Economic activity is unlikely to return to the US for a very long time - it's a 3rd world nation now - the decline of living standards is likely to be rapid.

As far as the US currency is concerned - its hard to know if it is going to keep sliding slowly, or have a sudden crash.

I was betting on a sudden crash - but it now seems a slow slide is the most likely way it will play out - I think there's maybe years of decline before it crashes totally.


##As a side note it is interesting to see the obvious attack by the controllers on Toyota - that is purely a trade attack, coming from the scum - no doubt about it. One wonders at the reasons for the attack - questioning 911? Selling US debt and failure to buy more? Interesting, but certainly Toyota is critical to Japans economic health - so an attack like the one launched is sending a powerful message - of course the Japanese can't just point out publicly that it is a CIA and media sabotage operation. I wonder what demands were made by the scum .. hmm .. perhaps it is a way of discrediting the current Japanese govt - after all I think that the current govt is resiting the globalist scum.

[edit on 17-3-2010 by Amagnon]

[edit on 17-3-2010 by Amagnon]