The bulk of his talk was taken up by examining the politico-economic aspects of what is going on in the world today with the main theme that government debt has become so big – and is continuing to grow – that it has passed its Minsky Moment – the point at which debt has become so large that it can never be paid off.
In many respects, according to Sprott, this is because the banking system has become too large so that, in many cases it is bigger in value than the country in which it is domiciled. Following the Lehmann Brothers collapse nearly bringing down the entire global banking system, banks are just being bailed out at ever increasing cost if they become totally illiquid for fear of the first domino falling and bringing down the rest of the system – they are just getting too big to fail at whatever cost, but eventually the dam could burst..."
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