The West’s governments are going to default, one way or another. Politicians cannot bring themselves to stop spending money the governments do not have. The deficits of the major Western governments are now so great as to be irreversible. The governments must now borrow money to be used to pay interest on money already borrowed. In the housing market, this is called a backward-walking mortgage. It invariably spells default. The subprime mortgages were mostly of this type. The West’s largest governments are therefore subprime borrowers. Politicians no longer speak about politically viable plans to call a halt to these deficits. They speak as though revenues will come from some unknown sources. They talk of reducing the debt-to-GDP ratios in the distant future. This is subprime mortgage thinking.
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Whiskey and Gunpowder