@jeeprs,
jeeprs;167223 wrote:I have not contributed to this thread before but have scanned quite a few of the pages.
My thesis is that the banking system of the world came within days of collapsing in September 2008. This was referred to at the time as 'financial apocalypse' but because it didn't happen, it doesn't get much attention. What it would have meant would be that one day we would get up, ready to go to work, and the banks would all be closed. And there would be no money.
Think about that for a moment.
Now we are hitting phase II. The European nations all owe each other billions - trillions - of Euros. The European banks are deeply involved in all of this. GB is not part of the Eurozone but is also heavily indebted. The worry is that if the weaker economies (Greece, Spain, Ireland, Italy) default on their loans, some of the big European banks will get into trouble. Again, the financial system is threatening to freeze up over this.
As I write this, the G20 are meeting to come up with a plan. But bailing out national economies is a far bigger issue than bailing out Citi and AIG. There ain't enough money to do it.
Now I don't think it is a question of capitalism vs communism vs socialism any more. The capitalist model is the current model. It has been around roughly since the advent of the Industrial Revolution and the end of the Napoleonic wars and imperialism. There are no real alternative models around. And we still don't know if this model is going to keep working.
Personally, I am very pessimistic. I think we are heading for a perfect storm of financial collapse, food and energy constraints, overpopulation (which is the main culprit) and climate change. Nothing like what we are seeing now has ever happened before, and I don't know if we're up for it. And I don't think capitalist systems have the remotest idea of how to respond.
We shall see. I don't think we will have to wait that long to find out.
---------- Post added 05-22-2010 at 08:12 PM ----------
sorry if I am being glum....
In the end, as a layman you do not have the experience to figure out what's happening in the worlds financial markets. I bet the experts don't even know. You can believe in this or that simplified internet theory, and certainly it will sound plausible and you can find data that confirms it. But ultimately you do not know. All our guesswork is of little value.
When you as a person or businessman borrow money, then you expect to do something with it. For example start a business or invest it in a way that you expect will give you a higher return than the interest plus inflation. Even if you borrow for consumption, like a new car, you usually borrow in step with what your future production will allow you to pay back, you just push your future consumption to now.
However western governments simply spend, the voters don't understand the economic consequences and the politicians won't be in power when the consequences arrive. They are a family with a modest income that borrowed money to buy three cars, a boat and expensive vacations. And then they borrowed more to pay the old loans and keep squandering, and now they borrow more just to pay the interest.
Any private family who would do that would start running out of people willing to borrow them money, and eventually they would default. But governments can bail each others out.
In the end it's a bailout for the debtors. The Greeks are stuck with their debt and have to suffer through painful taxation to pay off foreign debtors. Most of those who have to pay it didn't receive any of the benefits, but thanks to socialism we all sit in one boat and the productive citizens of Greece have to suffer for the bad decisions of others. In socialism, individual stupidity is collective harm.
I thought like you that we are heading for a great depression times ten financial collapse, but now I think the debtors are going to want every last cent back. Defaulting is the easy way out. But to default you have to run out of money, and they won't let us. Governments can create as much money as they want to bail out nations that default. They are going to want every cent back. It's going to be 90% taxes and very limited social services for decades to come.
---------- Post added 05-22-2010 at 01:36 PM ----------
xris;167221 wrote:I did not say hand outs did I? Yes there is a growing majority that cant afford full health care in your bankrupt system.
Actually 80% are happy with their insurance.
But you admitted that the system is broken, and not just "capitalist". Why should the solution be socialism, why not make it free market to fix it? You jump to the conclusion that only socialism can save us.
The problem is that you believe government intervention can magically create a free lunch.