One way or another, we're going to have to address the $trillions of outstanding bad debts. Over the past decade, the world’s central banks have distorted the price of money by bringing interest rates to record lows.
With credit so cheap, asset prices have risen dramatically as companies and governments have borrowed to the hilt.
And now with the “Everything Bubble” threatening to burst (perhaps in mid-bursting already?), we’re suddenly realizing that the phantom asset price gains were ephemeral, while the debts are permanent.
How will the economy cope with dangerously overleveraged nations, industries and households? Not well.
To discuss this massive problem and propose some potential solutions is Steve Keen, professor of economics at Kingston University in London and author of Debunking Economics:
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