Belmont Club

The ending year

Ralph Peters advises us to enjoy our New Year’s champagne. Next year we’ll eat the glass. Peters predicts not one, but a string of possible sovereign bankruptcies. Dubai, Greece, Spain, Eastern Europe. The world’s fourth biggest country is already bankrupt, and its’ name is California. But wait: if the world really gets unlucky we may get to discover the truth about China. Is it a robust economy, or is yet another Ponzi scheme?

Then there are the great unknowns, a Russian economy that may be far more fragile than anyone wants to admit, as well as China, opaque and insatiable.

One of the reasons China’s desperate to keep expanding its trade is that its banking sector is flimsier than chopsticks — plagued by uncollectible sweetheart loans made to favored firms and institutions. Perhaps Beijing will dominate the 21st century. But it’s also possible that China’s economy will turn out to be the biggest Ponzi scheme in history.

The best scenario we could see in the global economy in 2010? Rescue-package fire brigades rushing to deal with these crises individually. What’s the worst? A chain reaction that leads to a rash of national defaults, followed by a world banking and liquidity crisis, Part II.

But even if that happens and we temporarily have to do without the amenities now regarded as commonplace; if we go back to a time when Christmas meant sharing a pudding you had been looking forward to all year, or a new suit clothes to replace something threadbare, then for a brief moment in our material progress we might look around and notice the people we love and be glad to be with them one more time, for one more season.

Well, let’s hear it from a Canadian anyway.

[youtube 4FyzxhLWUxY]