By: Todd Wheatley     (c) IQ-2k
(written 10-14-14 / split & edited 06-01-19)

Economic collapse has been revisited many times and by nations, but never one that created a catastrophic domino effect. Prior to the 20th century large segments of the globe remained economically isolated and therefore immune to an economic contagion. That changed with the Great Depression (1929-1938) which extended well beyond the United States and actually provided the newly formed Soviet Union a base of power given its economic isolation. The 2008 Banking Crisis, by comparison, was little more than a reset.

Today (2014) with solid employment gains in the United States the global economy has restarted and intertwines by the day. Global markets, supply chains, and financial institutions are creating a web of international interdependence that could be likened to a house of cards. The 2012 European debt crisis, for example, brought the EU to the brink of disaster and slowed the U.S. economy as well. Fortunately the countries of the EU closed ranks and clamed the crisis.

The collapse of the EU would have been devastating if not catastrophic. Meanwhile another debt crisis threatens the simultaneous collapse of China and America. The magnitude of the U.S. is becoming unsustainable. On the positive side the size of U.S. debt holdings by China has resulted in an economic symbiosis. A counter-balance between the super-powers to keep tensions down.

Tension or no tension one still has to consider the magnitude of indebtedness that can lead to trouble and it very nearly happened. The country had just begun to emerge from one of the greatest recessions in decades when the 2013 U.S. budget battle exposed that debt as the "sword of Damocles". All of our "happy lives" hanging by a thread. Clearly there is cause for concern and while I do not want to be the bearer of bad tidings all I can say is welcome to the 21st century ... times have certainly changed!

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