http://www.forbes.com/sites/stevekeen/2016/03/27/the-seven-countries-most-vulnerable-to-a-debt-crisis/#e3cb9134edcd "..The bottom line is that private sector expenditure in an economy can be measured as the sum of GDP plus the change in credit, and crises occur when (a) the ratio of private debt to GDP is large; (b) growing quickly compared to GDP. When the growth of credit falls—as it eventually must, as growing debt servicing exhausts the funds available to finance it, new borrowers baulk at entry costs to house purchases, and numerous euphoric and Ponzi-based debt-financed schemes fail—then the change in credit falls, and can go negative, thus reducing demand rather than adding to it.."

Hi, Can't believe nobody noticed this, or if they have, allow me to repeat: http://www.theglobeandmail.com/report-on-business/economy/poloz-having-something-unpaid-on-your-cv-is-very-worth-it/article21439305/ 373 comments so far, and very negative...

Key quote: "..the less economically diversified resource-producing periphery provided the first indicators the world economy was slowing during this time period as the demand for their inputs into more diversified economies slowed.."

Major_Freedom: You're in deep water if you apply your prescient analysis to "intellectual" assets!

It's the vision thing; the economic development model post WWII (to which we all refer to, consciously or not) has faltered, and is threatening the entire planet's wellbeing. Globalization without diversification* sees an increasing number of people chasing an increasingly smaller resource-based wealth dream. As people lose their material dreams, few are able of quantifying their lives with a non-material lifestyle. Statistics are rarely correct; it's the immediate state or condition of the vision thing that matters, plus your ability to launch an initiative. *Diversification (e.g the "energy" sector) implies complexity, yes, but it makes for a multiple moving target, i.e. the cost of disabling it becomes prohibitive. We implicitly rejected complexity (e.g. externalized costs) when we decided to store nuclear wastes indefinitely. Had we diversified from the beginning, the amount of wastes would have been much smaller, and we likely would have found a cheap(er) way of getting rid of them, e.g. launching them into outer space.

This is how the Japanese took care of their poorly performing loans: http://reversewealtheffect.blogspot.com/ Saturday, December 27, 2008 Quote: Bubble is caused by peoples’ expectation that the price of certain asset(real estate) will rise in future, with pouring high-powered money to the asset side of economic entities’ balance-sheet. So, to solve this problem, such asset bubble on economic entities’ balance-sheet must be gotten rid of, by the new system as below.

"What Should We Do With a Semi-Abandoned U.S. City?" is the article itself, but the comments section really takes off and is probably worth reading only on its own! Here's a favourite of mine: "..On the other hand, Transition towns and transition farming is hugely important. We will probably see oil stabilize at over $100/barrel the next 2 years. We need to transition to more localized farming and food infrastructure. The hidden costs of shipping food thousands of miles are going to become quite visible as we enter the long tail of Peak Oil. The poor urban populations of cities like Detroit are going to be especially effected. Being able to use the existing urban infrastructure and ports for high density farming is one of the most important strategies for transitioning into a post-Peak economy." or this more specific one: "On the other hand, “Urban Farming” is far from “Half-Baked” idea. It’s been going on for decades, if not centuries under different names, and it’s growing in sophistication, efficiency and sustainability. It’s not even new or innovative at it’s core. It used to be commonplace. In World War Two “Urban Farms” were called “Victory Gardens”, and before that, simply “Kitchen Gardens”. Michelle Obama is famously reviving the practice of maintaining one at the White House. “Urban Farming” is a proven real and practical way to provide fresh, healthy, sustainable, and affordable food in inner cities. In expensive, densely populated San Francisco there is a co-op network where people grow crops in postage stamp sized yards and trade with others who grow different crops in their postage stamp sized yards so that they can pool resources and have a greater variety of home grown, organic, practically free fresh food. “Renegade Gardening” (the practice of planting crops on abandoned or unused public land) has been around since the seventies and is exploding in popularity because of the internet. So, if ordinary urban families anarchist renegades can successfully grow food with little or no money on little or no land, why is it unrealistic for someone with millions of dollars in resources, a great deal of knowledge, and a plentiful supply of cheap fertile land to do the same thing?.." There are references to southern Ontario in Canada, and I warn you - at least one troll! http://www.infrastructurist.com/2010/01/13/what-should-we-do-with-a-semi-abandoned-us-city/

I've seen this man on PBS; “There is No Return to Self-Sustaining Growth”: An Interview with James K. Galbraith (http://www.newdeal20.org/?p=7981) I wish I could find the excellent Time magazine article on microfinance published during the last 12 months; I would consider micro-lending to green companies advocating sustainable technologies. This is where small firms are forced to borrow money today - just above the acupuncture joint (ex-massage parlour busted by the vice squad): http://www.nytimes.com/2010/01/31/business/smallbusiness/31order.html?ref=business We could help rebuild a shattered economy world wide. Quoting from the Galbraith interview: "..It is a proposal for setting a new strategic direction for the economy and doing so over a relatively long time horizon with a view that you’re sustaining effort for 15, 20, 30 years.." It's a grass roots, boot-strap business model that will leave behind the "bigger is better", centralized Federal Reserve approach to financial and fiscal policies. I've read about local monetary currencies being instituted in enterprising small towns in the USA. Microfinance is but one aspect, potentially, of local currencies. Easier said than done, of course. One option is to travel and dispense the money based on local needs of communities. There was a travelling blog a while back about a guy visiting US communities that were regrouping for an alternative future.

Sorry if I'm repeating myself: in the early 1960's, mutual funds were the newest fad for the common man. Spreading the risk, how could you lose? Except that the business expansion model was based on one thing; "black gold" allowed the car culture and everything related or not to expand in an orderly manner using the existing regulatory structures. (A recent comment on economist's view is an attempt to describe one phase of this expansion, please see - http://tinyurl.com/lb2fez - Qoute "..The entire country went down the wrong road beginning in 1980 with Reagan and no energy policy and the pressing down of wages and unions. A lot of imbalances started to build despite a 'Great Moderation' that looks in hindsight to be just dumb luck and easily and foolishly exploited oil fields in the North Sea, Mexico and Alaska..") Countries as "healthy" as Canada still have some time to diversify in a true manner. Countries which have overinvested in unsustainable infrastructure will continue to be a drag on the world economy. Suggestions for the proposed recovery were presented recently by the Pope, as discussed in economist's view today - http://economistsview.typepad.com/economistsview/2009/07/the-caritas-in-veritate-social-justiice.html#more .

There was a time when scarcity of resources determined the economic level of prosperity. During the era of Big Cheap Oil, expectations regarding progress (in the broadest possible sense) increased like never before in economic history. Have we factored in a steadily decreasing supply of especially those resources that fueled (no pun intended) this expansion? Not if that is seen as undermining confidence in our seemingly innate ability to "create wealth". Housing prices should be ignored as a measure of confidence and faith in economic conditions. Better indicators would be: how closely the education system fits in with employers' expectations, how much energy and non-renewable materials are consumed in critical processes such as transportation, agriculture, manufacturing, medicine, education, etc. A frugal and judicious use of resources may avoid a "return to the stone age". The scaling down of our expectations will happen whether we choose to collaborate or not.