The Global Economy

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The Global Economy

October 12, 2022, 10:27:35 am

It's interesting how the mass media focusses on Growth and Interest rates.

I appreciate these are very important measures for some, and if you are retired you want high rates with low inflation, but the reality is growth and interest rates are only the primary focus of one version of global economics, and it's a pretty old version controlled by banks and old money. Some might claim it's a fairly myopic approach, because in reality it only measures one very narrow aspect of wealth.

While much of the world trembles and baulks at the idea of a recession, there are large regions that will sail on through "the terrors" simply because progressive leaders have already moved away from the growth model, and it seems they are killing it in terms of outperforming the rest. You don't even have to be a country to make this move, some individual states and regions have changed how they measure progress from growth, GDP and the like towards efficiency measures and they are reaping the benefit.

As I understand the problem is that the growth model is driven by greed, more sales, more widgets, more resources, more consumption means fatter wallets ............... for some. But it doesn't mean it is really more profitable, just the same percentages of a bigger number, full of all the same percentages of wasted resources as well!

The efficiency model changes from gearing wealth to the growing size of the pie, and starts making the slices go further by eliminating waste and improving efficiency. It's is a movement strongly opposed by the old world money.

The modern efficiency model is a bit like the Christian parable of "The Loaves and The Fishes."

Anyway, if the shizen is to hit the fan, I thought a venting thread might be quite useful for some!

Re: The Global Economy

Reply #1 – October 12, 2022, 11:58:13 am

World is in a mess in many areas, had to laugh at the Government in England who are abolishing higher tax brackets which will pump more money into the economy, then you have the Bank of England who are putting up interest rates trying to curb inflation so you have two forces pulling in opposite directions and clearly the Government have no idea what they are doing.
The Bond market has panicked in England and recession is forgone conclusion over there and most of europe imho.
The USA Fed will keep pushing up interest rates and Jerome Powell has shown little interest in backing off so I expect that to keeping flowing on down here even though Dr Phil Lowe backed off last rise with just a 0.25 rise but that was more about him and his crew being threatened with the lemon and sars by Albo and Dr Jim who dont want a recession in the first year of government and having such a large CoVid debt even though they found some extra dough under the couch from ScoMo.
Aus might escape recession technically but I think its going to get a bit worse before it gets better and the problem is that interest rates might peak and get a haircut but they wont be coming back down to the low levels they were and costs will continue to stay high for the average joe. The good news is that the financial sector is cyclical and up more times than its down over history and things will get back to normal eventually.

Re: The Global Economy

Reply #2 – October 12, 2022, 12:00:37 pm

We have kicked the can down the road about as far as we can. This is the recession that had to happen, and readjusted the measure of economic performance is not going to change the fact that $100 today is about as useful as $20 was back in the 1990s.

Re: The Global Economy

Reply #3 – October 12, 2022, 12:25:09 pm

Going to be interesting to see where this heads, in the past recessions always occurred under a command and control structure, management the old way.

COVID has unleashed the power of the general public, workers at the moment have choice, choices that really they have never had before. But will it be sustained if the economies of the globe turn to shizen?

I heard a podcast commentator declare that what is happening in Russia is the first step of Old Money versus the new ways, enabled by the fact that in Russia the general public is almost oblivious to what is happening elsewhere in the globe. The Old Money saw Ukraine's rapidly changing social environment and new found social independence as a real threat to the old ways that made them Oligarchs.

The current global social environment is almost reminiscent of the pre-cursor period to the French Revolution.