Collapse of the global financial system.
Discussion
Mermaid said:
Snoggledog said:
You're all far too optimistic.
You think this
. Nay. 
Observe please that they all have clothes, are happy, have transport and appear clean.
Take a look at the some of the ingredients in a typical bar of soap.
Shea butter (foreign import)
Cocoa oil (foreign import)
Paraben (foreign import)
Glycerine (Generally a foreign import)
Palm oil (foreign import)
When, not if, the whole system grinds to a halt even the simplest most basic things which we take for granted may no longer be available.
Snoggledog said:
. Nay. Observe please that they all have clothes, are happy, have transport and appear clean.
Take a look at the some of the ingredients in a typical bar of soap.
Shea butter (foreign import)
Cocoa oil (foreign import)
Paraben (foreign import)
Glycerine (Generally a foreign import)
Palm oil (foreign import)
When, not if, the whole system grinds to a halt even the simplest most basic things which we take for granted may no longer be available.
230TE said:
Snoggledog said:
. Nay. Observe please that they all have clothes, are happy, have transport and appear clean.
Take a look at the some of the ingredients in a typical bar of soap.
Shea butter (foreign import)
Cocoa oil (foreign import)
Paraben (foreign import)
Glycerine (Generally a foreign import)
Palm oil (foreign import)
When, not if, the whole system grinds to a halt even the simplest most basic things which we take for granted may no longer be available.
Snoggledog said:
Do we have enough horses left? Do we have a manufacturing base capable of handling those ingredients? Most critically of all, will there be enough power?
Power isn't a problem. We have a couple of hundred years worth of coal, easy. And if this all goes as badly belly-up as it might, no-one is really going to give a stuff about global warming any more. Every cloud, etc.donna180 said:
Interest rates should be far higher than now and things would reset - not painlessly but there's no such thing as a free boom.
I think this sums it up nicely.It's either big sudden pain, or a long period of mild pain.
We have gone for the latter which is fine. However, it seems that no one wants to believe that the latter option means time needs to pass for the debts to be paid off in a stagnant high inflation economy.
Accept that we have 5yrs of sitting around just standing still until things move again, and it'd actually be tolerable, but the constant meddling trying to fix it faster when it can't fix itself faster just seems like wasted energy to me.
Dangerous policy and politicians got us into the mess, it seems they will happily see us bodge and damage us getting out of the mess too
Mr Whippy said:
donna180 said:
Interest rates should be far higher than now and things would reset - not painlessly but there's no such thing as a free boom.
I think this sums it up nicely.It's either big sudden pain, or a long period of mild pain.
We have gone for the latter which is fine...
king clue what would actually be for the best in these extreme circumstances and are doing what all weak leaders do in the most trying of times.....nothing much, wait and see, something will crop up, pray, have a meeting, wear the new suit, etc.Fittster said:
"Are we seeing the final crisis (pdf) of capitalism? What I mean is that Marx envisaged that the end of capitalism would see four features, all of which are in place now.
1. The rate of profit would fall, reducing the motive to invest and producing slower growth and bigger recessions.
Although observed, past profit rates are high, companies’ reluctance to invest and the low valuations on shares suggest that bosses and shareholders anticipate very low future profit rates.
2. Low returns on real assets would lead to speculative bubbles and swindles and hence financial crises.
To some extent, the banking and euro area debt crises are the results of the dearth of real investment opportunities arising from the fall in (expected) profits. This lack of investment, combined with high Asian savings drove bond yields down. That led to the growth of mortgage securities, as banks tried to synthesize securities to meet demand for them, and encouraged governments to borrow. In this way, the seeds of the financial crises were sown by the fundamental crisis of real profitability.
3. Increased inequality would exacerbate economies’ propensity for crises, by creating a mass of people too poor to buy the goods which capitalism produced.
This has not quite happened. But, as IMF research has argued, inequality has had a very similar destabilizing effect. It led to the build-up of debt which contributed to the banking crisis.
4. By its end, capitalism would cease to be a means for developing the economy’s productive forces and become instead a barrier to their development. As Marx put it:
We are suffering from too little capitalism not too much. Throughout the western world familiar issues are seen:1. The rate of profit would fall, reducing the motive to invest and producing slower growth and bigger recessions.
Although observed, past profit rates are high, companies’ reluctance to invest and the low valuations on shares suggest that bosses and shareholders anticipate very low future profit rates.
2. Low returns on real assets would lead to speculative bubbles and swindles and hence financial crises.
To some extent, the banking and euro area debt crises are the results of the dearth of real investment opportunities arising from the fall in (expected) profits. This lack of investment, combined with high Asian savings drove bond yields down. That led to the growth of mortgage securities, as banks tried to synthesize securities to meet demand for them, and encouraged governments to borrow. In this way, the seeds of the financial crises were sown by the fundamental crisis of real profitability.
3. Increased inequality would exacerbate economies’ propensity for crises, by creating a mass of people too poor to buy the goods which capitalism produced.
This has not quite happened. But, as IMF research has argued, inequality has had a very similar destabilizing effect. It led to the build-up of debt which contributed to the banking crisis.
4. By its end, capitalism would cease to be a means for developing the economy’s productive forces and become instead a barrier to their development. As Marx put it:
1. Capture by state workers of the power to set their own pay and benefits leading to excess pay and pension rights in the public sector
2. The growth of the 'non-working' classes lavishly supported and encouraged to breed by the state.
3. Ever more onerous environmental burdens, the drive for 'renewable' energy principal amoung them.
In many ways the west is paying the price for its decades of success that allowed these burdens to florish and grow, and the parasites to grow fat and ever more greedy. Now, faced with the challenge from the rising economies of the east, they are falling to their knees.
turbobloke said:
Mr Whippy said:
donna180 said:
Interest rates should be far higher than now and things would reset - not painlessly but there's no such thing as a free boom.
I think this sums it up nicely.It's either big sudden pain, or a long period of mild pain.
We have gone for the latter which is fine...
king clue what would actually be for the best in these extreme circumstances and are doing what all weak leaders do in the most trying of times.....nothing much, wait and see, something will crop up, pray, have a meeting, wear the new suit, etc.I think it makes some sense and would admit that was the strategy I would be taking.
However, personally, I'd have gone with the former. Having spent a decade being prudent I'm now pissed off that it's the prudent that are feeling the most pain having all their savings and equity build-up being stripped down and essentially used to fund the toxic debt!
Dave
Mr Whippy said:
..However, personally, I'd have gone with the former. Having spent a decade being prudent I'm now pissed off that it's the prudent that are feeling the most pain having all their savings and equity build-up being stripped down and essentially used to fund the toxic debt!
Dave
You are not alone Dave
Mermaid said:
Mr Whippy said:
..However, personally, I'd have gone with the former. Having spent a decade being prudent I'm now pissed off that it's the prudent that are feeling the most pain having all their savings and equity build-up being stripped down and essentially used to fund the toxic debt!
Dave
You are not alone Dave
Then, we now know that those beliefs are, today, considered of no worth.
Which might help explain the total mess many of the Western Nations are now in.
There are some traditional values that have merit.
JagLover said:
We are suffering from too little capitalism not too much. Throughout the western world familiar issues are seen:
1. Capture by state workers of the power to set their own pay and benefits leading to excess pay and pension rights in the public sector
2. The growth of the 'non-working' classes lavishly supported and encouraged to breed by the state.
3. Ever more onerous environmental burdens, the drive for 'renewable' energy principal amoung them.
I live in the US, where the recession is just as bad as it is in the UK. The three points you raise seem to be UK centric rather than European or Worldwide issues.1. Capture by state workers of the power to set their own pay and benefits leading to excess pay and pension rights in the public sector
2. The growth of the 'non-working' classes lavishly supported and encouraged to breed by the state.
3. Ever more onerous environmental burdens, the drive for 'renewable' energy principal amoung them.
It looks like each country (with a few exceptions) has its own problems that are getting getting fully exposed to the light of day.
Olivero said:
I live in the US, where the recession is just as bad as it is in the UK. The three points you raise seem to be UK centric rather than European or Worldwide issues.
It looks like each country (with a few exceptions) has its own problems that are getting getting fully exposed to the light of day.
Each western country has some of the problems that are greater than the other, but the US is not immune. Many state workers in the US for example have some of the most generous pensions in the developed world and it would be hard to argue that the US does not have an underclass that regard welfare as a way of life. An added burden on the US economy is excessive litigation, which is really just another parasite on the efforts of business. It looks like each country (with a few exceptions) has its own problems that are getting getting fully exposed to the light of day.
Moreover I would question how much you know of Europe if you do not regard welfarism and excessive state sector employment, pay and benefits as being near universal throughout western europe
JagLover said:
Each western country has some of the problems that are greater than the other, but the US is not immune. Many state workers in the US for example have some of the most generous pensions in the developed world and it would be hard to argue that the US does not have an underclass that regard welfare as a way of life. An added burden on the US economy is excessive litigation, which is really just another parasite on the efforts of business.
Moreover I would question how much you know of Europe if you do not regard welfarism and excessive state sector employment, pay and benefits as being near universal throughout western europe
The point I was making is that there doesn't seem to be one universal problem or solution. Moreover I would question how much you know of Europe if you do not regard welfarism and excessive state sector employment, pay and benefits as being near universal throughout western europe
While I agree generally with all the points you make, the real problem (financially speaking) seems to be the actual rate of taxes paid by corporate America and the more wealthy members of the public.
I lived in Italy for 5 years, France for one and was married to a Dane, so have a fair idea of how Europe 'works'.
Snoggledog said:
Mock the Week was quite good tonight on the subject of Greek debt Dave
230TE said:
Fittster said:
But the problem now is deeper than then. Capitalism has lost its underlying oomph; investment was low, remember, even before the recession. And this suggests that its vitality cannot be restored by policy measures, be they Keynesian (“boost demand”) or Thatcherite (“attack workers“).
Interesting and mostly coherent analysis, somewhat spoilt by the instinctive need to put the boot into Maggie Fatcha. The decline of British heavy industry in the 1970s and 1980s was a human tragedy of epic proportions. But even with the benefit of hindsight, I can't see how there was any alternative to what happened to coal, steel, shipbuilding and of course British Leyland. Money trickles up not down, and it seems to me that, scale of the public sector aside, what we need is a mechanism to get the money not to the rich but back to the average working guy because that is where the demand is going to come from. That is the point where capitalism breaks down, if indeed it does, because you get the winners sitting with all the money and all of the productive capacity and no-one to buy the stuff. First they try giving the money back to them with strings attached via finance and finally that doesn't work either. They have won the game of Monopoly, by hook or by crook, and what good has it done them?
The problem in the 70's, and it was no small one, was that these industries were the nest of militant unionism, and rather than smoke it out, they destroyed the whole kitten caboodle. They still build ships in Germany.Unfortunately for Mrs.T her government was far too dogmatic, and many industries were scrapped which should really have been kept going. Is it really true that we are going to prosper as a service based economy driven by the City of London? That's what they believed.
Edited by cardigankid on Monday 10th October 17:33
cardigankid said:
All very interesting. The problem with Marx, for all the relevance of the points made above, is that so far as I can see, he entirely failed to anticipate the inability of the Government to run any kind of enterprise.
Marx never called for the Government to run organisation."the state is a mechanism dominated by and utilized in the interests of the ruling class to subjugate other classes, to legitimize the existing socio-economic system and to promote the interests of the dominant class."
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