While there is mostly “happy talk” coming out of the White House these days with regard to the U.S. economy, there are troubling signs on the horizon, which are apparent for those willing to see them. British analyst Richard Murphy is predicting a new financial crisis like 2008, but triggered not by the government deficit that everyone seems to be so concerned about, but by the accumulated private financial debt, which has boomeranged beyond all expectations of getting it “under control” without sweeping reforms.
Murphy notes that vast quantities of outstanding bank lending are secured on mortgage and commercial properties, which could then be sold to cover lending if there is a default by a lender. “Whilst politicians, neoliberal commentators, the mainstream media, and others wish us to be distracted by the supposed risk that government debt poses to us, and to our grandchildren—the lucky ones of whom will inherit a share of it—the real likely debt risk that will create the next global financial crisis is almost certainly already on the balance sheet of most of the world’s major bankers,” Murphy writes.
