Now all the stages are set for bloody battle of suburbs

Posted on October 4, 2012 by

A NATIONAL debt crisis, such as the one Ireland is now suffering, tends to follow a four-stage pattern. We see these stages playing out in every episode of national bankruptcy — whether in Latin America, Asia or Western Europe. In Ireland, we are moving towards the third phase.

There is no escaping this pattern because the mathematical corollary of a housing boom is a debt bust. It is only a matter of time.

Now those suggesting that the endgame will be debt repudiation are taking the flak. But it will happen.

Let’s briefly examine the four stages of national bankruptcy.

The first phase is rapid: highly leveraged banks go bust alarmingly quickly. This leads to massive state intervention to prevent a bank run, political upheaval and inklings of just how deep the mess might become.

The second stage is a period of unusual calm. The remedial action taken by the State calms things down, banks don’t collapse, there is no run on the banks and the economy settles in to the grinding reality that falling incomes and too much debt don’t mix.

During this period, vested interests, powerful “insiders” in society, move to protect themselves. Supposedly binding agreements are signed. Likewise, the banks do deals with debtors in the hope that they can postpone the day of reckoning.

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full article at source: http://www.davidmcwilliams.ie/2012/10/04/now-all-the-stages-are-set-for-bloody-battle-of-suburbs?utm_source=Website+Subscribers&utm_campaign=100ad2f1af-03102012&utm_medium=email

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About machholz

I started this Blog to get out of my system the absolute rage that I have for the corrupt politicians and their Banker Buddies. I’m an ordinary guy, married with kids, and have firm opinions of what is right and what is wrong. I’m not afraid to say it even when it makes me unpopular. I reproduce news all manner of articles, but will always confirm the source of the articles; this is a compliment to the source of such news pieces. But if you do not agree with this and you are the original author, I will take down any article when requested to do so. I do not assume that the author of the news articles share with my views, I include news articles to give readers another slant to my views or to illustrate what the mainstream news media say on the relevant topic. The opinions expressed are my own but I do not accept liability for them, If I have offended you or made a factual error please put on record the truth by leaving a comment. In addition, my thoughts and opinions change from time to time...I consider this a necessary consequence of having an open mind. This weblog is intended to provide a semi-permanent point in time snapshot and manifestation of the various memes running around my brain, and as such any thoughts and opinions expressed within out-of-date posts may not the same, nor even similar, to those I may hold today. For the record I am currently an Independent political activist and am not affiliated to any political party
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