IMHO, the global economy never fully recovered from the Great Recession of 2008, which was a essentially a liquidity crisis resulting from the popping of a credit bubble that fuelled over-investment in non-productive assets. [defining "non-productive assets" as those that produce no returns nor prospective future returns commensurate with the level of investment, i.e. speculation on appreciation of capital irrespective of potential profits. A form of Ponzi scheme, fueled by enthusiasm rather than rationality]. The sub-prime mortgage crisis was a private credit crisis. The U.S. Government successfully mastered the crisis, creating liquidity by 'printing money out of thin air', to save the Too-Big-To-Fail Banks and the rest of the financial system. But it then continued in the same manner, way beyond what was required. To produce yet another 'bubble', where excess liauidity once again gave rise to nominal fiat-currency values far in excess of real value. It was claimed that this money printing would lead to runaway inflation, but official statistics (doctored as they are) did not show this. For a simple reason: government largesse was distributed to the big commercial banks, who in turn passed it on, at very low interest rates, to their wealthiest clients. Who had little need for extra offerings from Main Street. They invested it instead on Wall Street and in real estate. Which is where prices inflated. The richest grew richer, the rest of society was left to wallow. To cut a long story short, because I wish to turn in, and few if any will have read this far: we are likely on the verge of another mega-recession, but on a far greater scale than the last, and without the tools that existed before. It could be the end of the global economic system as we know it. But rest assured that a portion of the "0.1%", or whatever one likes to call them, are planning to come out on top once again. More definitively this time.
.thumb.jpg.d9f3e54432a0ae65f4d5beb0d2d122ce.jpg)
Create an account or sign in to comment