Keith: 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.
Ed: I don't think a "non-inflationary world reserve currency" is ever going to happen, Keith, and certainly not in our lifetime. The Euro functions as such a currency for the countries of the EU, and we can see the very difficult problems that Greece and the other PIGS are encountering. Despite the resolve of its governement, I see Greece abandoning the Euro and moving back to a currency that is under its control, the drachma. You can see other EU countries doing the same thing. ----- Original Message ----- From: Keith Hudson To: RE-DESIGNING WORK, INCOME DISTRIBUTION, ,EDUCATION Sent: Saturday, July 02, 2011 4:07 AM Subject: [Futurework] Credit-crunch II still awaits 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
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