Bill for Global Crisis: Between $60 Trillion and $200 Trillion
The global economic crisis that has gripped the world since 2007's bank runs and credit crunch has a new price tag: between $60 trillion and $200 trillion has been lost.
According to the Bank of England, the UK alone lost £7.4 trillion since 2007 ($11.17 trillion). A trillion is one million million (http://en.wikipedia.org/wiki/Trillion).
The crisis' voratious appetite for consuming wealth in return for public tax-payer support for the banks and the economic system may not even be enough it claims. According to the Bank's executive director for financial stability, Andrew Haldane: "It is possible that no amount of capital or liquidity may ever be quite enough. Profit incentives may place risk one step beyond regulation. That means banking reform may need to look beyond regulation to the underlying structure of finance."
Apart from the economic system as a whole being damaged by the crisis, the middle class in the developed countries seem to have taken a heavy hit. According to an article by Andrew G. Marshall, the world is entering a new period of global economic structure. One where the developed world's middle classes will sink further under the weight of debt.
He says: "In the past few decades, the middle class has been forced to survive on debt. In order to maintain the image of middle class, and to maintain the functions of the middle class (i.e., to consume), the middle class needed access to credit and had to descend into a class of debt. Now, as the world is undergoing a rapid social, political, and economic transformation, the middle class has been marked for death. As a debt crisis takes the nations of the world into debt servitude, the middle classes of the western world will lose their access to credit, and will be forced into repaying their debts. As nations fall under a debt crisis, the middle class will collapse with it. A class built and sustained on debt is not sustainable. We are entering into a period of rapid class transformation on a global scale."
As can be seen, the fall out from the crisis is far from over.
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New York, United States