Wednesday, 8 October 2008

Comment on Financial Turmoil : 8th October Dr David Hill

The government's rescue of the banks may stabilise the global financial crisis temporarily, but where the far bigger problem of economic stagnation and decline lies firmly upon the horizon now. The reason, with the US's total debt when all is taken into account at the end of 2007 was $51.1 trillion (projected to increase to around $53 trillion by the end of this year), sheer interest payments estimated at over $2 trillion a year, estimated toxic debts of financial institutions of over $4.1 trillion and total global debt exceeding $100 trillion (approx. 2-years of total global GDP output), no amount of capital injection will save the global economic system from eventual collapse as it is being pursued today. I give it no more than 18 months to fail.

The only situation that could bring global stability to the economic system is the influence of China and its direct intervention. Unfortunately pride by Western politicians will not allow this to happen, but where eventually they may have no other option but to take this decision to save the world economy from decades of economic stagnation. That is what we risk now with uncoordinated political indecisiveness in the West. These are plain truths and no more.
Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

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