Here are some interesting charts that show just how bad the debt problem is:
Even though it seems like the USD is gaining ground lately, a look at the following chart shows that the reason for this is that currencies are being debased against one another. The chart shows the Euro against the Swiss Frank.
http://ca.advfn.com/p.php?pid=qkchart&symbol=FX^EURCHF
Even though a strong currency temporarily hurts imports, over time it allows a country to buy foreign assets cheaply, and generates wealth. It would seem that governments are more concerned with short term outcomes rather than long term solutions. A good example of this is the willingness of central banks to be over-exposed to toxic debt.
Over at Thompson Reuters, they created a nifty flash gadget to show bank exposure to Greece's debt: http://graphics.thomsonreuters.com/11/07/EZ_BNKEXP0711_SB.html
Economic Sufficiency
The USA and Canada are fairly self-sufficient, despite all of this currency mess. If push came to shove, there would be no need for any North American to starve as North America is effectively the breadbasket of the world. Hopefully we will remember this rich blessing with generosity as we see countries around the world struggling to provide citizens with basic necessities at non-back breaking prices. We also have a growing abundance of oil, uranium and geothermal exploration projects; important things to remember going forward.
Despite these, the financial outlook for the west is dim in the sense that we have been over-spending and artificially inflating our 'wealth' for too long. It is abundantly clear that there is no way for us to continue the charade of being ultra wealthy. It's going to come tumbling down eventually, and the smart investor will know how to position him/herself to be protected when it happens, and gain some profits along the way.
Addicted to Oil
This isn't just a media catch phrase. It describes a reality that I think too many of us like to pretend doesn't apply to 'us.' I've been to, and have close friends and family who have visited several developing and third-world countries. I can tell your with certainty that people are not easily willing to give up their access to the benefits of oil-related products. In Haiti, for example, people are struggling to find clean water to drink yet the roads are still packed with cars from dawn until dusk in Port Au Prince. Go figure. This is simply human nature at work - we get used to something, and are not easily able to change our ways unless we are forced.
On a happy note, it's Wednesday and Sunny in my neck of the woods, so I greatly look forward to spending some much needed time in the great outdoors.
