One more thing. Agree that Western economies will be slowing down. Some call it a long term depression. Others call it an evolution to a stable state economy. We should be thinking about how to make the transition to a stable state economy. Will be difficult and involve cultural shifts but the alternative, a long term depression, seems more problematic.
arthur From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Thursday, August 16, 2012 8:10 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: [Futurework] Arthur's 4th belief At 21:17 15/08/2012, Arthur wrote: 4. That effective demand has to be maintained if we are to avoid an economic meltdown. Effective demand can't be maintained if there are no uniquely new consumer goods in sight -- as obtained all through the industrial revolution until about the 1980/90s. Since then we have had nothing really new, only amalgamations of existing products (e.g. smartphones), fashion changes and marginal improvements. It was only then that a whole new tranche of credit money (derivatives) had to be launched in order to keep the economic machine going. Until the 1980/90s, derivatives were straightforward insurance schemes whose notional cover matched that of world GDP on a 1:1 basis. Since then, complex derivatives rose to 10 times world GDP, such was the desperate need of the investment banks for consumers (and governments) to keep on spending. So what is the future. It can only be a great simmering down of Western economies into long-term depression or, if the US Fed and the ECB persist in money-printing, hyperinflation. Keith Keith Hudson, Saltford, England http://allisstatus.wordpress.com <http://allisstatus.wordpress.com/>
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