I see from this morning's papers that Goldman Sachs is forecasting
that consumer confidence will bounce back and all will be at its
Panglossian best from now onwards. As well it might. After all, even
Goldman Sachs is now making some of its staff redundant and badly
needs a livelier stock market so that it and its fellow investment
banks, such as JPMorgan, can recommence fleecing ordinary investors
such as pension funds with their high-frequency, algorithm-driven
methods as they were doing last summer. The dawdling stock market
this year, not knowing what to do, must be quite frustrating for them.
Yes, GDP will continue to grow at a low level (in the UK and Europe
as well as the US), sustained by the continuing immigration of poor
people who are busily taking up the low-paid jobs that still exist
and stocking up with the standard range of consumer products. But
what about the indigenous population? Consumer confidence is still
in shock, retailers are failing in most major cities, house prices
(except those in the highest range in choice locations) are still
static, if not declining, as are real, rather than nominal, wages for
the mass of the population due to inflation.
Goldman Sachs and its ilk have had a field day in the last 30 years
as they accelerated the availability of credit far beyond anything
that has occurred before in the whole history of the Industrial
Revolution. The 2008/9 credit crunch was only a partial therapy.
Realms of second and third degree derivatives have yet to be
neutralized, and mountains of property debt, private and commercial,
have yet to be either suffered or worked off in the balance sheets of
the retail banks -- whatever they, or their friends in governments may say.
And over and above all that, the major problem has yet to be solved.
How can Western governments -- with few exceptions -- possibly pay
off their growing government debts from taxation? They'll only be
able to do so by means of substantial assets sales. And these, in
order to fully realize their value can only be spaced out over a
period of many years. And these sales can only begin to start when
there's a non-inflationary world reserve currency available to them
and which satisfies both the advanced and the emerging countries. The
IMF and our most recent institution, the G20, show few signs of
achieving this so far even though they're aware of the problem. As is
always the case in the affairs of man, it will take a catastrophe to
fully concentrate our minds. Credit-crunch II still awaits.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/07/
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
