The 1990s was the debt decade.With the clamor of the big
to devour the small their debt became unbearable.
The snip-pets below are just a sample of a must read 14 page
article that will put our world debt problem to light.
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On November 13, 2001, two weeks before Enron filed bankruptcy on December 2, the Baker Institute honored Greenspan with its Enron Prize, which the official press release said "gives recognition to outstanding individuals for their contributions to public service.
As Henry Kravis, king of the leveraged buyout, famously said: "Debt can be an asset. Debt tightens a company."
, the total notional principal balance of the reported derivatives market in June 2001 was $119 trillion
All kinds of street rumors are flying at this very moment that one of the world's biggest banks is exposed to derivative trades that would cause serious counterparty credit problems if the market capitalization of this bank should fall below a triggering level, or the price of commodities or interest rates should move against its derivative positions. Because there is no way to dispel or confirm such rumors, and the bank involved remains tight-lipped about its true financial conditions, the uncertainties weigh down on the economy.
If Greenspan had been better versed in debt economics, he would have understood that a debt bubble, unlike the conventional business cycle, cannot survive the slightest deflation.
Greenspan's attempt to engineer a soft landing by raising interest rates to fight pending inflation pre-emptively only accelerated the debt bubble's burst.
Once the bubble was on its way, Greenspan was on top of a debt tiger that he could not get off without being devoured by the beast.
Without debt, there would have been no New Economy, no dotcom industry, no telecom explosion, no structured finance, no budget surplus and no current account deficit or its flip side, capital account surplus.
The 1990s was the debt decade.
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