Via Bloomberg we have George Soros suggesting that the current rush to austerity is reminiscent of the early 1930’s as he suggests that we are only just entering Act 2 of the global financial unwind (emphasis mine) :

Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”

Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.

Concern that Europe’s sovereign-debt crisis may spread sent the euro to a four-year low against the dollar on June 7 and has wiped out more than $4 trillion from global stock markets this year. Europe’s debt-ridden nations have to raise almost 2 trillion euros ($2.4 trillion) within the next three years to refinance, according to Bank of America Corp.

“When the financial markets started losing confidence in the credibility of sovereign debt, Greece and the euro have taken center stage, but the effects are liable to be felt worldwide,” Soros said.

And it’s not just the EU that needs to find vast amounts of money as we see from the following US May budget numbers from ZeroHedge (emphasis mine) :

The May US deficit came in at $135.9 billion, the third highest (or, technically, lowest) May on record, but better than last May’s $189.7 billion. This number was made up of total outlays of $282.7 billion and receipts of $146.8 billion, 3rd and 4th highest ever, respectively. Sequentially, the number was $53 billion worse than the April deficit of $82.7 billion. Total interest on Treasury debt was $23.8 billion, or 8% of total outlays.

UK debt levels (and most others for that matter) pale into insignificance compared to those numbers. One way to get a perspective on the money involved here is that the US debt interest for May alone is the same an the entire annual GDP of Estonia.

Whilst we are just talking of monthly debt interest here, remember that the US national debt is currently around $13 trillion dollars or to be exact, courtesy of this site :

Now I don’t know about you but I have a problem with actually imagining the amount of money involved here, but not to worry as the following little video neatly demonstrates just what $1 trillion would look like. Having seen it, I would settle for half a pallet of cash quite easily.
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