You want an outlier scenario? Here's one: I am increasingly of the view that we will see calls for a first-world debt relief conference in 2012-2015. I've been saying this privately for some time, but I might as well put it out there.
The case:
We watch Greece's rescue continue, while troubles cross the membrane into Spain, Portugal, and elsewhere, and the U.S. remains the largest ticking debt-bomb on the face of the planet. It is going to increasingly seem to more and more debtholders around the world time to have a discussion about what we do. (Everyone inflating their way out is a path to a second-stage collapse, but one-off haircuts solve nothing systemic.) No, my guess is that we will sometime soon see a call for a first-world debt conference -- and leading the calls, of course, will be emerging markets, like China who hold so much of the debt. What a wonderful reversal.
[Graphic via NYT]
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