The elephant collapses

"... I hardly ever discuss the elephant. I don’t even like to reach out and tug at his tail or touch his trunk, because he’s so damned big and overpowering. He’s much more significant than anything else I can see, but before long he will flatten our puny little bamboo village, and there’s no way to stop him. Any lengthy discussion of the looming pachyderm seems pointless.

I refer, of course, to the elephant of the coming economic collapse.

I make no predictions about when its enormous legs will begin to cut their inexorable swathe of destruction. I read all the doomsday forecasts back in 2008, and they all turned out to be wrong, at least in their predicted time frame. The signs that were predicted back then — the rise of oil and food prices, continuing unemployment, the stagnation in GDP, and the flight to precious metals — have begun, but they are clocking in two years later than predicted.

So the global financial system seems to be a lot more resilient than most people thought. The Powers That Be are adept at jury-rigging, and have patched up the decrepit machine with bailing wire and duct tape — i.e. bailouts and quantitative easing — to help keep it running for a little while longer.

However, the entire structure must eventually come crashing down, and the longer the postponement, the more spectacular will be its fall. The Western welfare state is built out of enormous, unthinkable quantities of debt. It is the greatest Ponzi scheme in history, and its demise is mathematically inevitable. The only question is exactly when the scam starts to unravel in earnest — the outside limit is about a generation from now, when the demographic disaster can no longer be papered over.

...  the party will be over much sooner than that. I tend to agree, but I’m no expert, and I’ve seen a lot of experts fail in their predictions. So I present no timelines, but the end of the world’s current financial regime is coming soon, and there isn’t anything that can be done to prevent it."

See : http://gatesofvienna.blogspot.com/2011/03/shadow-knows-part-one.html.

The author may be wrong - I sincerely hope he is - and he may be right. But I tend to agree with the analysis ; how can we get out of the spectacular mess we are in ? That  is a totally different problem. Hyperinflation ? War ? Nobody knows, but the outlook is bleak, to say the least ...