Boomerang: Travels in the New Third World

Michael Lewis has a new book called Boomerang: Travels in the New Third World. Highly recommended. Difficult to read because he outlines in a unique, offbeat fashion, the systematic pattern of financial exploitation that has been hammering the globe since the collapse of leverage in the 2008 timeframe. Not difficult to understand, mind you. Lewis presents the material almost as satire. The context of the current financial mess is made very clear.

Greece has been in the news of late and until I read his book, I did not have a clear understanding as to the breadth of the economic challenge that faces this country. Here is an excerpt from the book:

… the International Monetary Fund and the European Central Bank had between them agreed to lend Greece — a nation of about eleven million people, or two million fewer than Los Angeles — up to $145 billion…

That was the good news. The long-term picture was far bleaker. In addition to its roughly $400 billion (and growing) of outstanding government debt, the Greek number crunchers had just figured out that their government owed another $800 billion or more in pensions. Add it all up and you get about $1.2 trillion, or more than a quarter-million dollars for every working Greek. Against $1.2 trillion in debts, a $145 billion bailout was clearly more of a gesture than a solution. And those were just the official numbers; the truth is surely worse. “Our people went in and couldn’t believe what they found,” a senior IMF official told me…

… as it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a pinata stuffed with fantastic sums and give as many citizens as possible a whack at it.

After reading this book, my sense is that the global economic mess is going to get a lot worse.

1 reply
  1. Mike P
    Mike P says:

    It’s even more grim when you account for the fact that a lot of real, non-borrowed wealth has a value that is predicated on the ongoing availability of cheap energy sources.

    Reply

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