Global Debt Storm - Osborne

[Mecky]

The rest of the world isn't.

 

I see you've let yourself down was again.

[I1L2T3]

Who’s claiming that?

 

The coalition were. It doesn't seem to be fashionable any more.

[Tony]

Don't be daft Tony

 

You're not the only one in denial but it keeps getting explained and it doesn't seem to be going in.

 

A large proportion of the planet is doing OK and has done right the way through the mess that the north Atlantic and European nations are in. Contagion might see that end though.

[I1L2T3]

You're not the only one in denial but it keeps getting explained and it doesn't seem to be going in.

 

A large proportion of the planet is doing OK and has done right the way through the mess that the north Atlantic and European nations are in. Contagion might see that end though.

 

Tony, it's a "global debt storm". George Osborne said it yesterday. Is he wrong?

[Tony]

It might well turn out that way. I hope not though.

 

I get the uncomfortable feeling that you and others are looking forward to a meltdown to make some sort of weird political point, as if the clock was somehow reset in May 2010.

[Mecky]

Tony, it's a "global debt storm". George Osborne said it yesterday. Is he wrong?

 

He only said it's a global problem now because the tories are in power and they can't remedy the situation - it's not their fault. They are in denial that they rapidly yanking the entire country to the stoneage despite the media and economists, even members of their own party, telling them otherwise. One thing is for certain, when we're no better off come the election, it will be all Labour's fault again.

[Cavegirl]

We had a dot com bubble stimulated by people with no money wanting to get some of the easy money they saw other getting, when that crashed we had a housing bubble stimulated by people with no money wanting to make some of the easy money they saw other making. The bubbles were inflated by low interest rates, greed and the ability of people with no money to borrow it easily.

George Osborn along with many other people saw a problem with this easy credit, he accused Gordon Brown in 2006 of being the pusher who has created Britain’s “debt addiction”. Many people saw it coming but didn’t realise the scale of the problems it would cause. It could have been avoided easily by restricting the easy credit, one way of doing that would have been to increase interest rates. Obviously if Gordon Brown had increased interest rates people would have stopped spending and the economy wouldn’t have looked as rosy.

 

My bold

 

I wonder whether you've stopped to think firstly about where all of this 'easy money' came from in the first place and secondly how people with 'no' money might be able to gamble on the stock market?

 

The easy money came about initially because the value of the dollar was detached from gold in the 1970's resulting in enormous and continuous currency inflation (money printing) which has crashed the US CPI and led to a downward spiral in dollar purchasing power. Add to this the issue of stagnant wages over the past 30 years at a time when productivity was rapidly increasing due to technological advances and you'll find that the majority of money was heading up the social ladder and only a tiny fraction of it has been/ is being redistributed back down.

 

Bankers, insurers, financiers and corporate CEO's have been making disgusting amounts of money in the west because they stopped paying people wages that kept up with the inflationary value of their currency. Some of this money they spent on new technology that meant they could lay off many of their staff, some of it was spent outsourcing their companies operations abroad where they could pay even lower wages, a lot of their money they gambled on the stock exchange (after all it was very easy money) and through this they created several bubbles as you describe (we're currently in a commodities bubble that has to burst some time in the near future) and finally they deposited enormous sums into the banks (which were accruing interest) which enabled bankers to loan out the money (that should have been payed as wages) to the workers, at interest, so that they could rob us all blind a second time.

 

Further down the social ladder middle class people were having an increasingly hard time. Whereas in the 1970's a family could survive from just the husband's income whilst at the same time saving a good portion of their annual income, it gradually became clear that for a more recent family with two people working they weren't bringing in enough to enable them to continue in the lifestyles they had become accustomed to. They couldn't afford two cars, child care, the mortgage, college fees as well as a holiday every year because every year for 30 years their wages in real terms had increased only marginally (if at all) whilst the purchasing power of their money diminished rapidly. So they borrowed from the banks equivalent to the wages that they ought to have been payed in the first place. Do you see how this works? This happened in the US but it certainly feels familiar to us in the UK.

 

The bankers have spun it- they want you to believe that it was the mortgage loans they made to the poorest people that caused the 2007/08 crash, (because people tend to have less sympathy for poorer people and nobody really considers themselves amongst them) but it was really related to how they'd sucked both the middle and working classes in the US dry. These people, in good jobs, tried to work harder and longer hours to keep up the debt repayments but you may as well try to swim against a strong tide, eventually it had to come crashing down. Then it was our turn because their globalised dream was in truth a corrupt contagious nightmare.

 

But Capitalism didn't fail- for the elites it worked marvellously, actually the working people failed to see what was happening to them and if we don't demand a new economic system it will all happen again because the finance capitalists will know they've gotten away with it. Not only that, but they also get to choose who gets bailed out (with more of our money) and who gets thrown to the dogs (like Lehman's) for the vultures to pick over. Fewer competitors is not a bad thing for them.

 

Now you tell me, if I can see this (and prove it if necessary), and you can understand it- why hasn't Osbourne or Balls or any other politician told you what really went on here? Do you think they aren't telling you because they can't see it for themselves? If that's the case then they're too useless to be in charge of anything (and should be removed anyway). Or perhaps it's because they don't want 65 million of us to realise we've been robbed blind at least twice (not counting other corrupt practices like monopolisation and privatisation) and start demanding our wealth back. Which do you think is more likely?

 

Stop defending these people- all of them- and start changing this system before it's too late for us all. The elites want a new world war because it's good for business, troops are moving into position as we speak, we simply can't let that happen.

[Tony]

Whereas in the 1970's a family could survive from just the husband's income whilst at the same time saving a good portion of their annual income

 

it gradually became clear that for a more recent family with two people working they weren't bringing in enough to enable them to continue in the lifestyles they had become accustomed to. They couldn't afford two cars, child care, the mortgage, college fees as well as a holiday every year because every year

 

You see what you did there?

[I1L2T3]

It might well turn out that way. I hope not though.

 

I get the uncomfortable feeling that you and others are looking forward to a meltdown to make some sort of weird political point, as if the clock was somehow reset in May 2010.

 

The point is that we've had a year of political point scoring which has deflected attention away from banks. We've had an opposition that has abjectly failed to influence the agenda.

 

And now conveniently, that the Vickers report is a done deal providing only watered-down delayed action on banking, that domestic fiscal policy is out of control do we have the Tories finally acknowledging a global problem and turning some attention to the root cause of the problem.

 

It's too late. We've wasted a year. All the parties should be ashamed. And no, I'm not looking forward to what is going to happen.

[Cavegirl]

If wages had continued to rise with inflation Tony, two working people in the household ought to be living a very good life indeed despite the extra living costs- instead middle class couples have been defaulting on loan and mortgage payments left, right and centre. The entrance of many many more women to the workforce has just made it less apparent until now that wages haven't risen.

 

Would you perhaps recommend polygamy as a potential remedy to this situation? Just keep adding more people to the household to stave off stagnating wages and rising costs.

 

A lecture about it here: