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"We are all Greeks" - so begins one of the best reports on the unsustainability of the status quo, and on what "the new world order" will look like, created by SocGen's Veronique Riches-Flores. Her overarching observation: "No one can claim immunity from a Greek-style spiral" because "Our economies are mature, with weak potential GDP, especially post the financial crisis" and due to that old standby which everyone chooses so conveniently to forget, yet which is the biggest threat to the world's "welfare-state" stability, in existence since 1860 and which has been responsible for no
That, in a nutshell, is it, no matter how many protracted essays one reads predicting the future (or war in Europe): the truth is there is increasingly less cash flow, coupled with increasingly more demands for cash.
With no other way out, at least fiscally (the monetary discussion is a whole different topic, and one which will be a source of ever increasing tension both in the US and Europe, where as the most recent bailout demonstrated on one hand the ECB is demanding the creation of a fiscal union and the issuance of Eurobonds to remove "money printing" pressure from it, while the fiscal authorities will hear none of it and instead demand that the ECB print ever more in order to avoid blame when it all goes horribly wrong), the next step is a substantial cut in public investment. The social response will not be enjoyable.