greed on credit .....
One could ask the question: how did the financial system got us into such a mess?
First one has to look at the value of anything and nothing…
On average:* Real inflation has been around 8 per cent for the past ten years
* Workers » remuneration has increased by around 4 per cent per year
* CEOs remuneration has increased by about 300 per cent (conservative figure).After 5 years, workers are roughly 22 per cent behind in accepted value of fish things.
CEOs are about 250 per cent in front. The poor are still behind the starting blocks.
Some things have fluctuated in price: oil by 700 per cent (500 % inflation adjusted) down to flat level (inflation adjusted). Other things have increased by calculated inflation value, plus increased costs of manufacturing and provision for a minimum 15 per cent increase per year profit for investors to be content with.
Most manufacturing was shifted to China to cut cost of production and increase profit margins by about 200 per cent.Governments of the world have calculated fictitious « official » inflation between 3 and 4 per cent.
GDP of the world was US$54.62 trillions in 2007.
Value of Real Estate in 1999 around 110 per cent that of GDP in the US…
Value of Real Estate in 2007 around 140 per cent that of GDP in the US…
Increase of perceived value approx 30 per cent (discounting inflation).Say similar figures for rest of world with small variations …
Say that conservatively 50 per cent of the Real Estate value is on credit …
Say that credit repayments have become unmanageable versus income, as income diminish in real terms in some sectors.Plus Sub-prime loans became a large hole in the credit fabric.
There is a point a which, stitches in the jumper start to unravel.One thread breaks and the whole thing falls apart, unless repaired quickly.
We have not fixed the unravelling. We’re fixing a little thread: too late.
Stock prices have devalued by about 50 per cent in the last two years. Price of gold has gained about 20 per cent and climbing.There is a fictitious accepted value of things that fluctuates with hope it will increase.
There is a minimum accepted value of things at which we stop acquiring more stuff.
There is a minimum value of things at which people won’t accept devaluation below it and will revolt — as they cannot survive.
There is a perception that thrifty people have been screwed by "spendrifts" who bought things:* they could not afford
* on credit under encouragements of governments that wanted to maintain growth
The greatest threat to the financial system is itself, followed by an increasing urgent and increasingly important global warming factor encompassing population growth, asset growth, reduction of natural space, increase of climatic trauma.Our financial system relies on an equation that leads to filling the jar without leaving space to move.
Stylistic analysis of processes, in which we glorify our illusions versus our animal reality.
Glory takes many forms but mostly dismisses our animal reality to our detriment.We need to become humanely intelligent again. Most Greek philosophers had more understanding of humanity than we have now at large, to the exception of a few thinkers whose mind are not cluttered by irrelevant entertaining that takes us away time from our own care and management.
When looking at all the differentials, one can calculate the value of the black hole of illusion values. In my book, this comes down to about 15 trillion dollars and will stay yearly about the same till we’re able to rewrite by urgent choice the real value of global warming and environmental degradation into our economic equations. So far, the attempts by world leaders on this urgency have been pitiful and more or less useless.
* Boom and bust versus steady growth analysis…
* The disappearance of savings …
* The value of the future not be left to speculation.Unsustainability in our life by greed on credit… the price being highly beyond our comprehension.
Increasing world population to increase the value of the pie is a nasty piece of work that leads to a greater problem.