Thank you - very informative post.
What is bothering me is the recurrent feeling that the financial system could come crashing down and stop working altogether, and there is an economic collapse. Not a downturn, or even depression, but collapse. I believe this came close to happening in September 08, in the week Lehmann's collapsed. When the banking system collapses, what happens? Nobody has spelt this out, but I think what happens is that the banks close, the ATMs are all turned off, and suddenly there is no money in circulation. If that happens, law and order would be very difficult to maintain. Public services and utilities would be extremely hard to maintain. It is a nightmare scenario.
My wife tells me not to think about things like this, because it is too depressing. I don't want to be alarmist, but I also don't want to be asleep at the wheel. After the 2008 crisis, the world went back to business as usual much too fast for my liking. 2009 was kind of unreal - it started with everyone muttering 'depression' and ended with everyone breathing sighs of relief, as if everything could just go back to being like it was. But I think there are very deep structural problems with the world economy. I don't like the conspiracy theories, but at the same time, I don't think the citizens are being told the truth. And I also think a lot of people don't understand the problems we are facing. It amazed me during the 08 crash the number of so-called experts who were taken completely by surprise.
I am encouraged by the fact that the Greek government has actually bitten the bullet. I think the Greeks deserve a lot of sympathy and support at this point. I hope it is firewalled at this point, and some sensible analysis and real reform be introduced before the whole system reaches a complete crisis point.
---------- Post added 05-08-2010 at 12:47 PM ----------
Postscript: the reforms that need to be undertaken must be conducted by disinterested parties
. Disinterested parties are those who don't stand to gain financially from the decisions being made. By definition, this cannot include the banking sector.