Around the world we hear of many governments and other bodies struggling with their finances and needing mutual help. The general idea seems to be that if they all generate enough fiat or debt money to either bail out or to lend to each other then somehow it will all end well.
The snag is these are the only ones we hear about. But it is apparent in many states it is not only the government that is in trouble, it is the local or regional authorities, the state owned or supported major activities and much of welfare provision.
Each of these is more or less dependent on their government although many have become enmeshed in the global financial system to add to the complications. There are reports of many
city, county and the rest individually being in trouble with apparently no way
Effectively they are bust and the same is the case in
and other places. In the Spain UK we have had one health authority, South London, go into administration and the odds are
that there could be many more either on the brink or in reality insolvent.
In all the countries that have had major pension schemes running for many decades a great many authorities and organisations are prisoners of their pension fund commitments. Their actual services have become legacy activities being run for the benefit of their managements and past and future employees.
being held up as the potential great saviour of the Euro being theoretically
the richest and solvent. Look around the
regions and townships etc. as well as local banks and this is far from being
the case. Should Germany
experience some stresses a good many could be in real trouble. Germany
I am sure that my own local health authority is broke having done a great deal of building recently using the fancy Private Finance Initiative method of funding it all. The county authority is also struggling and the town seems to be operating on a wing and prayer for much the dame reasons.
In the meantime all the managements prattle on with the business lingo, claiming to have strategies, visions, missions, game plans and the whole bang shoot of MBA techniques for spending more and borrowing more thinking that dressing up the accounts with purple prose will do the trick.
This lot could all just crash very easily just as too many racing cars going into a narrow chicane can crash. The only rational description for the way we are all behaving seems to be Chapter 3 of “Alice In Wonderland”, “A Caucus Race And A Long Tale”. It is there on the web.
In the case of world finance it could be less of a long tale than a short sharp shock.