The four Accountants of the Apocalypse
One of the main concerns behind the scenes of the negotiations to be the next Government was the deep seated belief that the global economy is about to implode.
Since the 2007-2008 Global Financial Crisis, all the developed world has done is kick the day of market reckoning down the road with more and more money printing. At some point this band-aid won’t be able to stem the pressure building and it will rupture with a backlash that will make the depression look like a week without pocket money.
What will hit first? Economic armageddon or Environmental apocalypse?
It’s difficult to know what will hit us first, the Economic Armageddon or Environmental apocalypse caused by our dangerously warming climate.
I suspect they will both combine to create something beyond our scope to deal with.
When you are getting market spreads like this, panic doesn’t even seem to sum up the proper response. Remember, a spread above 30 points suggests elevated risk and a spread above 40 calls for ‘defensive measures’. Last week the spread was almost 50 fucking points…
Economic crash IMMINENT: Fears grow as markets hit high not seen since Black Tuesday
There is a growing sense of foreboding amongst economists who believe the market is poised to repeat what happened during the dotcom bubble and the Wall street crash.
Stock values have reached levels not seen since those two disasters and a correction would throw the world economy – currently seeing an ongoing boom period – into disarray.
Graham Hacche at the National Institute for Economic and Social Research (NIESR) said:“In both cases, sharp market declines followed these high readings.”
He went onto say the cyclically adjusted price-earning ratio (the Shiller CAPE ratio) has risen above 30 which shows “markets may have become increasingly vulnerable to shocks.”
…the question is no longer if, but when and where the economic crash will start and cascade from.
China could be the trigger…
The news during the Chinese Communist Party Congress was supposed to be uniformly positive. But the Oct. 19 press conference of Zhou Xiaochuan, the governor of China’s central bank, was not. After admitting that the country’s high debt was high, he surprised everybody by adding that it was not so high as to cause a “Minsky Moment,” a sudden meltdown of asset prices. It was a fascinating insight into what worries China’s economic leaders and the tough choices they face.
Add in the sabre rattling over Chinese expansion into the Pacific, Venezuela imploding, North Korea going nuclear, Saudia Arabia launching war on Lebanon or a total collapse in Central Africa and any knock from Climate change could topple the global economy into free fall…
From Miami to Shanghai: 3C of warming will leave world cities below sea level
Hundreds of millions of urban dwellers around the world face their cities being inundated by rising seawaters if latest UN warnings that the world is on course for 3C of global warming come true, according to a Guardian data analysis.
What does a left wing Government do about it?
Anyway you want to look at it, the immediate future looks bleak, so what should a Left wing Government on these far away Shaky Isles do about it?
First of all, let’s appreciate the beauty and luck of our distance.
It’s near impossible for refugees to climb into boats and flee here successfully, we have a globally low debt to GDP ratio and we have enough fertile land to feed ourselves.
In short, the tyranny of our distance is going to end up being what saves us while the planet goes into meltdown.
Government will need to look to step in to bail the dairy industry out and help with conversions from dairy farms into growing trees, it will also need to extend that protectionism to first time home buyers who will get swamped by steep interest rate hikes.
Rapid moves to self sustainable energy supplies will be required and a Universal Basic Income will become necessary.
Self sufficiency from power generation to home vegetable gardens will become cultural norms.
This would be a perfect time to allow real advancement of new industries to replace farming like synthetic food production and green technology that is focused on adaptation.
A crisis is an opportunity. Once people see how capitalism has failed them they will demand a difference approach from the new Government, it will be up to the new Government to have the vision to see those demands through.