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Is the World Economy 'A House of Cards'?
Why Read: Because this is an interesting summary of one person's view of why 'a physicist turned risk consultant' sees the global economic system as a 'house of cards waiting to be blown down' - and a summary 'in one place' to think hard about.
Commentary: TEOTWAWKI is an unpronounceable acronym that stands for 'the end of the world as we know it'. David Korowicz, an Irish risk consultant - described as 'a thoughtful, deeply knowledgeable, highly analytical, and caring man' - worries, for the following reasons, that we may be headed for the ultimate global economic crash which will not be reversible. He apparently focuses on seven things:
the world economy's current complex inter-dependencies;
unprecedented household, business and governments indebtedness;
virtually non-existent interest rates (in the developed countries) with attendant lack of flexibility;
the contagion potential that exists in the present system;
that economic models used by policymakers do not take into account the extreme stresses evident in the world economy;
that previous economic shocks have been more 'country isolated' than would be a large economic shock today given current world economic inter-dependencies; and,
the stability of current country financial systems is premised on a condition of persistent growth, which depends on expanding energy supplies.
I suggest you read the referenced article and, importantly, focus on the conclusion reached by its author summarized Mr. Korowicz's concerns. That conclusion is, simply stated, that 'things are not as bad as all that', and that the wealthy minority who depend on the economy likely will succeed in averting a collapse in at least the 'medium term'. I consider the referenced article to be a real 'think for yourself' one - and recommend it to you.
Topical Reference: How cascading failures in the global finance system could mean TEOTWAWKI, from Energy Bulletin, Kurt Cobb, August 5, 2012 - reading time 4 minutes.