Sovereign nations coming to grips with the loss of their fiscal solvency can be likened to the stages of grief.
This article was written by Tim Scala, President of TRCI.
We human beings are fairly predictable in the face of adversity. When something ends sadly, be it the life of a friend or family member, a relationship or even something like a job, we grieve. The grief can vary from mild to devastating, but nevertheless, we tend to travel through the classic stages defined by Elizabeth Kübler-Ross in her 1969 book On Death and Dying. Kübler-Ross hypothesized that the grieving process encompassed five specific stages, namely:
- Denial
- Anger
- Bargaining
- Depression
- Acceptance
It would appear that this is precisely what we are watching sovereign nations experience as they come to grips with the loss of their fiscal Solvency. While the process is taking place at different times for each country or group of countries, the actions playing out on the global stage seem to fit neatly into the Kübler-Ross model.
Europe seems to be well ahead of the U.S. since Greece, Spain and Portugal have progressed beyond Denial and appear to be well into the Anger phase. The U.S. and France seem to be stuck in Denial, although one can make a strong case that the prevailing political environments seem to be taking both us and them headfirst into the Anger phase.
It’s an open question, however, where Japan sits in all of this, after two or three decades of economic stagnation, and quantitative easing. Looks like Denial to us.
We would argue that, back in 2012, the U.S. was solidly inside the Denial stage since the Presidential election demonstrated that the U.S. electorate simply denied the unsustainability of the national debt at $16 trillion and counting. Looking back, it is difficult to deny that the winning candidate showed no willingness to reverse our perilous fiscal path.
While some respected voices continue to maintain that there was a plan afoot to balance the revenue/expense dynamic driving our massive deficits, we have concluded that they, too, were simply in denial.
We would point to a number of factors, palpable then, indisputable now, which ensure that our current fiscal path has arguably passed the tipping point and is inevitably headed for disaster.
The U.S. outlook should be particularly troubling for the world at large, since it arguably boasts both the largest free economy and the world’s reserve currency.
National fiscal developments seem to mirror disturbing social trends:
- Student loans have impaired the debt position of our younger demographic, resulting in serious, long-term effects. There is now more student debt outstanding than credit card debt. Nearly an entire generation will exit college with enough outstanding debt to put off, voluntarily or involuntarily, buying a home, the traditional driver of economic activity.
- Student loan balances in G.19, FRBNY-CCP: 1st quarter 2006 through 1st quarter 2015
- Aging baby boomers are confronted with the opposite conditions their parents faced: rising liabilities (debt) and stagnant or declining asset (real estate) values. Boomers will further exacerbate both fiscal strains and economic growth by putting greater strains on Medicare and Social Security, and adjusting their spending habits to comport with expanding debt service requirements.
- Falling indebtedness will be largely attributable to default rather than repayment.
Grieving is perhaps the most emotionally painful of all human activities. It’s an excruciating thing to witness but worse still to experience firsthand. We aren’t particularly happy to present such a downbeat scenario but sadly, our most optimistic projection is that we adjust to the 'new normal' which puts a cap on GDP growth for a number of years going forward.
At this late date, even if we were to alter our fiscal path, any adjustment significant enough to correct the situation will be painful, while failing to address it will ultimately lead to even more dire consequences. Bluntly put, our choices have come down to bad and worse. We can only hope that we move through this process quickly and with a minimum of pain, but recognizing that we will likely be forced to deal with the difficult stages that remain ahead of us.
This article was written by Tim Scala, President of TRCI.
We human beings are fairly predictable in the face of adversity. When something ends sadly, be it the life of a friend or family member, a relationship or even something like a job, we grieve. The grief can vary from mild to devastating, but nevertheless, we tend to travel through the classic stages defined by Elizabeth Kübler-Ross in her 1969 book On Death and Dying. Kübler-Ross hypothesized that the grieving process encompassed five specific stages, namely:
- Denial
- Anger
- Bargaining
- Depression
- Acceptance
It would appear that this is precisely what we are watching sovereign nations experience as they come to grips with the loss of their fiscal Solvency. While the process is taking place at different times for each country or group of countries, the actions playing out on the global stage seem to fit neatly into the Kübler-Ross model.
Europe seems to be well ahead of the U.S. since Greece, Spain and Portugal have progressed beyond Denial and appear to be well into the Anger phase. The U.S. and France seem to be stuck in Denial, although one can make a strong case that the prevailing political environments seem to be taking both us and them headfirst into the Anger phase.
It’s an open question, however, where Japan sits in all of this, after two or three decades of economic stagnation, and quantitative easing. Looks like Denial to us.
We would argue that, back in 2012, the U.S. was solidly inside the Denial stage since the Presidential election demonstrated that the U.S. electorate simply denied the unsustainability of the national debt at $16 trillion and counting. Looking back, it is difficult to deny that the winning candidate showed no willingness to reverse our perilous fiscal path.
While some respected voices continue to maintain that there was a plan afoot to balance the revenue/expense dynamic driving our massive deficits, we have concluded that they, too, were simply in denial.
We would point to a number of factors, palpable then, indisputable now, which ensure that our current fiscal path has arguably passed the tipping point and is inevitably headed for disaster.
The U.S. outlook should be particularly troubling for the world at large, since it arguably boasts both the largest free economy and the world’s reserve currency.
National fiscal developments seem to mirror disturbing social trends:
- Student loans have impaired the debt position of our younger demographic, resulting in serious, long-term effects. There is now more student debt outstanding than credit card debt. Nearly an entire generation will exit college with enough outstanding debt to put off, voluntarily or involuntarily, buying a home, the traditional driver of economic activity.
- Student loan balances in G.19, FRBNY-CCP: 1st quarter 2006 through 1st quarter 2015
- Aging baby boomers are confronted with the opposite conditions their parents faced: rising liabilities (debt) and stagnant or declining asset (real estate) values. Boomers will further exacerbate both fiscal strains and economic growth by putting greater strains on Medicare and Social Security, and adjusting their spending habits to comport with expanding debt service requirements.
- Falling indebtedness will be largely attributable to default rather than repayment.
Grieving is perhaps the most emotionally painful of all human activities. It’s an excruciating thing to witness but worse still to experience firsthand. We aren’t particularly happy to present such a downbeat scenario but sadly, our most optimistic projection is that we adjust to the 'new normal' which puts a cap on GDP growth for a number of years going forward.
At this late date, even if we were to alter our fiscal path, any adjustment significant enough to correct the situation will be painful, while failing to address it will ultimately lead to even more dire consequences. Bluntly put, our choices have come down to bad and worse. We can only hope that we move through this process quickly and with a minimum of pain, but recognizing that we will likely be forced to deal with the difficult stages that remain ahead of us.
Institutional FX Demand Continues to Climb in April
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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