[ExI] cyprus banks

[Eugen Leitl]

On Mon, Mar 18, 2013 at 04:35:04PM -0700, spike wrote:

> There are some remarkable parallels between the USA and Greece.  The
> sequestration could be interpreted as US-style austerity, a very mild
> version of it.  The US federal government is borrowing 40 cents on every
> dollar it spends.  Clearly this is not sustainable, so what is the endgame?

The endgame is loss of trust, loss of the special status as reserve
currency (can take a while still, I would have expected that would
have happened already a while ago), and a sovereign default.

> Commentary by Europeans welcome please: if we extrapolate current trends,
> where does this lead?  What happens?  The government insists it cannot cut
> anything, and they already raised taxes.  So what happens then?

See above. It's provably impossible to pay back the debt, and 
quantitative easing to get rid of debt is not sustainable, since
it destroys the value of the currency long-term.

Make no mistake, this is not merely a financial crisis.
This is a systemic crisis, fueled by high prices of energy
and peak everything in general, exacerbated by competition
through globalization ( http://www.theoildrum.com/node/9871 ).

This should have been addressed with long-term, expensive
structural changes going back to 1970s. That did not happen,
and our abilities to change the global course are largely
gone, and the rest is evaporating fast.

I hear the successor to Chu is a natural gas and nuke man.
I'm very much not impressed with Chu's work, and I expect
even less from his successor.