I agree with you. But the world's money is invested into world stock markets and they are the indicators of world econmony. The world's biggest companies are listed on Stock exchanges/market.
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Not to be argumentative, but a "crash" could mean both. I heard Texas Teachers Retirement fund lost around $1 Billion when Enron went under. I, too, worry about loan defaults and pension fund losses.
I don't know how many of you would agree, but it seems to me that the difficulties you have been discussing will largely be inflated away with the balance made up via tax creep. We should see lowered living standards, as wages are unable to keep up fully with inflation and an increasing real rate of taxation. I don't expect hyperinflation nor a collapse of the monetary system in any Euro or North American country, nor in Japan, Korea or China. Just creeping inflation at a somewhat accelerating rate. I do expect there to be some nasty competition between central banks to see who can devalue the most without the others crying "foul." Because this is my outlook for the next 20 years or so, I expect stock markets to continue to rise over time to keep pace with inflation. I don't expect the net returns in constant dollars from equities to outpace what they have been since the 1970's. If anything I would expect a slight contraction in constant dollar net returns going forward, particularly in the more mature markets. I wish it were possible to say with confidence that debtor nations will be able to right their financial ships through increases in productivity, but I just don't see that as being possible. I hope I am wrong. When you eat high on the hog for an extended time without the productivity to justify your appetite, you will eventually run out of tenderloin and have to eat chitlins instead.