Deciphering my tweet

My tweet: "A much worse debt crisis awaits us, perhaps the sooner the better, caused by having kicked the 2008 crisis can down the road, while keeping serious miss-regulation of banks. When it hits, an Unconditional Universal Basic Income, however small, might be society’s only survival tool." 

Just looking at the huge debts of all sectors, in all nations; sovereigns, corporations, house financing, student debt, credit card debt and unfunded social liabilities; that which among other converted homes into also being dangerous investment assets; and pushed the consumer and government demand that should be there to prop up the future economy to prop up the current, there's no doubt that “A much worse debt crisis awaits us.”

Since it was our generation that trusted populist besserwisser technocrats to know what they were doing, for instance when they told us “We will make your bank systems safer with our risk weighted capital requirements because we know what the risks are”, this is really our generation’s made crisis. In this respect, because we should not leave that crisis to our grandchildren to take care of, and also because we do not want that debt to grow even more, that’s why the “perhaps the sooner the better”. 

QEs or asset purchase program, ultralow interest rates and many continues fiscal deficits clearly explains the “caused by having kicked the 2008 crisis can down the road” (forward and upwards).

The risk weighted capital requirements for banks in Basel II assigned a 0% risk weight to sovereigns, a 100% risk weights to the citizens who make the sovereign strong; and allowed banks to leverage a mindboggling 62.5 times their capital with private sector assets rated AAA by human fallible credit rating agencies. That caused the crisis. As much of those distortions are still well and alive, that  should more than suffice to explain the “while keeping serious miss-regulation of banks”.

“When it hits”, that’s when all polarization and redistribution profiteers of the world, like Venezuela’s Chavez and Maduro, will be out in masses on the street trying to capitalize on the mayhem, in order to increase the value of their franchises.

And that’s precisely when and why “an Unconditional Universal Basic Income, however small, might be our society’s only survival tool.”

If only we had all understood and accepted  the benefits of a hard landing.