Recession is looming – say the media. Where do they get their information and how can they be so sure, or is it just guesswork or preconceived notions…..
Companies are reporting fair results, even very good, as the quarters roll by. Their cash piles are growing bigger and bigger. At the same time the rate of unemployment in many countries is alarmingly high.
The economies of a number of countries are in crisis as the ability to handle debt is no longer there, budgets are severely unbalanced.
The central bankers are using their tools which are interest rate setting, keeping rates near zero, buying bad bonds. This is clearly not enough.
The budget deficits will not go away by themselves, and action is required. The politicians are scared stiff of what they must do, as reelections become unsure.
And the stockmarket is jumping about, going here or there for many reasons, all of which are founded on uncertainty and fear. Bondmarket yields are going down.
So companies are not doing so bad, but finance and money are going bust as there is too much debt, too little liquidity. Where have all the money gone ? Surely they are somewhere? We now see a system gone awry.
So we must have more investment, central banks must buy bonds with freshly printed money.
But the money are not staying where they are most needed, they move in search of profit, across borders, speculation is rife, weaknesses are there to be made money from. Capital movements are not controlled by politicians, the investors have the money and their search for profit is unceasing. The capital movements of investors may be bigger than what politicians can find for their purposes.
So a huge agenda is coming up in order to solve this as we need taxes up or down, sufficient social benefits, budget balancing, voters attention, investor happiness, new financial and monetary mechanisms and all of this must be coordinated.
It is simple really. Just establish programs to stabilize debt and make state finances robust, then keep economic activity up and going by investing in the private sector, and establish mechanisms/loans to reduce short term insecurity and imbalances. Easy, is it not?
This agenda is obviously too big as the solution is supposed to be provided by a few nations or perhaps many nations fixing other people´s problems. A single nation can no longer fix its own problem as all is intertwined.
So the good solution will not be found, and we lumber on.
The only real solution is to let the defaults begin, we must have the crashes so that strict and proper practices can be developed. Those who have done wrong must suffer now, and leave the rest out of it. The lending without risk must stop, the borrowing without limits must stop. We must build accountability, responsibility regimes in all places so that trouble can be pinpointed and solved where it is found.
We are uncomfortably close to a one world economic system, a global system where all is connected and which surely is too dangerous to have. A global solution should never come because that will fry us all in the end. The investors can save us as they have the money but the strings attached are heavy, so we must not let them do it. What country wants be the first colony of a new world government? Let us all think and act like the Icelanders!
A good future requires that we start all over and that is a mighty task.