In what is frankly a pretty depressing assessment of the crisis, Ferguson suggests:
It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable. The question is whether the general destabilization, the return of, if you like, political risk, ultimately leads to something really big in the realm of geopolitics.
Fortunately, he sees China continuing to support US debt – because it can’t afford to have US consumers stop buying Chinese-made products. He also doesn’t see increased military strife or war – but, otherwise, he’s forecasting that lots of adjustments will be required to deal with the fundamental de-leveraging that’s just begun.