RE: DID OUR "WORLD LEADERS" JUST PUSH GLOBAL RECESSION AWAY from our doorsteps?
Hi Piotr,
Thanks for this interesting topic. I think you get the concept quite well. The more money in the economy the more goods should be produced to compensate it. All countries are using the same economical concept which means growth can be created by increasing the money supply. Countries all over the world are doing it at least since 2008.
In Switzerland for example we have a negative interest rate. This means that you are actually being paid for making depts! How crazy is that.
Growth and cheap money a very short term solution
Politicians worldwide believe that a good economy depends on growth and that this growth can be optained by increasing the money supply. This works and we see the results everywhere. Products are getting cheaper and cheaper. We buy to throw away which results for example in huge plastic waste in the oceans all over the world. We also have a bad alocation of funds as you point out quite well. Instead to use this money to invest we have bubbles in the real estate market and the share market.
Countries and individuals can buy with the money of tomorrow by using dept but there is a point where the charge of the dept doesn't allow it anymore. In a way this point is already reached in many places(Greece, Italy, Argentina, South Africa,...). Once the point is reached where the dept can't be served anymore there is no solution. Everybody seems to put their head into the sand and ignore this. What will come then? I can only think of quite negative outcomes, like Venezuelian like hyperinflation.
These "growth with cheap money" policies have the result that we not only rob the future generations of their economical development but we also produce all the waste of the future today and ruin the planet.
We have to come up with another set of policies
Protecting the climate and the environment, protecting the interests of future generations, in short sustainable developments starts with having a new set of societal values that are different from purely economical values.
hello @ achim03
In order to achieve a stable economy, social principles must be evaluated; A consumerist consciousness has been created that states that we should eat the hen of the golden eggs, that we should consume the seeds. If we sacrifice the chicken we will not have more eggs; if we consume the seeds we will not have to sow. Consumption awareness should be generated, which will lower the debt.
You are quite right. We live in world of greed where we want to make money of the chicken, the eggs, the seeds and even the nutriments for the earth. One generation uses it all. We should learn that we dont need consumption and growth to live a happy life...
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Thanks for sharing your thoughts @tramelibre
Yours, Piotr
Dear @achim03
Thank you for your great comment.
That's very unique. I wonder what is advantage and disadvantage of that solution. In a long term (probably longer than our life) this system sounds like a economical suicide.
ps.
Recently I've bumped into this site: https://www.usdebtclock.org/world-debt-clock.html
It does shows debts of all major countries and I noticed that with few exceptions everywhere debt is increasing. However 4 countries (including Poland and Germany) seem to have their debt going down.
And I was wondering how could that be possible? Also I realized that Poland has very good ratio between debt to GDP (around 50%), which is great comparing to countries like France (107%) or Italy (147%). Not to mention JApan (261%).
I found it so confusing. It would suggest that Poland have more stable economy than majority countries out there. Looking at those numbers could even suggest that Japan is serious financial trouble.
Mind sharing your thoughts?
Yours
Piotr
Hi @crypto.piotr,
I found the link quite interesting. It's amazing to see how much dept there is around and how fast it developps. I share your feeling about confusion... It's difficult to interpret these numbers correctly. One thing we should keep in mind is that all these dept is compared to the GDP. So this means that to make these numbers look better governments can either reduce the dept by reducing spending, or they can try to increase GDP by spending even more. Politically speaking it seems always easier to spend more to "encourage" the economy.
Probably the whole castle of cards would come crumbling down if we had a new economical crisis with lower GDP's.
What can we expect of this? I don't know but I doesn't seem a healthy tendency ...
Cheers
Achim
Cheap money is a temporary solution. Then, it becomes a problem. Repeat as necessary.
Cheap money is Indeed a temporary solution but a solution that used makes the problem worse in the long term. We will come to the point where we need another medicine to solve this problem...
Right, the problem is exacerbating. And there's no new medicine available yet. Hope someone comes up with a solution.
Yes @ majes.tytyty....u r right. This temporary solution will only lead to Permanent problem!