| Anybody else think the global economy is about to go pop? 07:30 - Oct 5 with 4084 views | BanksterDebtSlave |
https://www.theguardian.com/business/2023/oct/05/evergrande-the-runaway-develope
As an aside, a Chinese property giant called 'Country Garden' .....you couldn't make it up.
"Since regulations were tightened in 2020, companies responsible for about 40% of Chinese home sales have defaulted, and another major firm, Country Garden, has also battled to avoid missing massive debt repayments, raising the prospect of the risk of contagion." |  |
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| Anybody else think the global economy is about to go pop? on 09:43 - Oct 5 with 1430 views | lowhouseblue |
| Anybody else think the global economy is about to go pop? on 08:18 - Oct 5 by Herbivore |
Economic crashes generally disproportionately affect the worst off in society. |
it's really not rocket science is it. |  |
| And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show |
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| Anybody else think the global economy is about to go pop? on 09:50 - Oct 5 with 1395 views | bluelagos |
| Anybody else think the global economy is about to go pop? on 09:12 - Oct 5 by BanksterDebtSlave |
I have a sneaky suspicion that family Slave might be 'suffering' more than family Stokie!
Properties are somewhere to live not stores of wealth/financial assets. It is financial institutions that lose the most as their notional balance sheets would be toast....as they would be too. If on the way down these people try to evict folk from their homes I will be there helping to fight off the bailiffs, I'll see you there!
So, do you sense a crash coming or not. |
Not for me. I think the (2008?) banking crisis was a genuine moment when things were on a knife edge., not this imho.
China appears to have ridden a wave with extreme lending (is that a term?) and could have lots of shock waves in terms of its ability to finance / grow into the future.
I think the bigger issues are around our population/demographic changes. Many parts of the world have birth rates below 2 which when added to the longer life we live, means a crisis of working age shortages...
The only real way we solve this (assuming we can't enforce baby making) is with population movements from where we have too many to where we have to few. But this is so far from the wishes of the majority that I can't see this being resolved without significant unease.
Better to be honest with the populations in the wealthy parts of the world than to continue to demonize those looking for a better future by moving.
Back to the OP, the Chinese do have some economic challenges looking ahead. Some investors will take a kicking, but I don't see global collapse of capitalism.
Back in the UK we are seeing house price falls in both real and relative terms. Hopefully not a full on crash but we definitely need an adjustment to help younguns have the same chances us oldies had. A 20% fall would cause lots of problems. A 5 year flat market with 20%* of inflation/wages growth would give the same thing without negative equity and for me would be welcome.
*Over the 5 years |  |
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| Anybody else think the global economy is about to go pop? on 09:53 - Oct 5 with 1384 views | WeWereZombies |
| Anybody else think the global economy is about to go pop? on 09:32 - Oct 5 by Guthrum |
The Chinese property market is not the global economy (it's a very naughty boy).
Yes, if the Chinese economy goes wrong (insofar as a government-controlled, command economy can), there will be less infrastructure investment in some parts of the world - particularly Africa - but there also won't be the resource grabbing and geopolitical strings attached.
The fall of the Soviet Union's economy in the 1970s and '80s didn't lead to global collapse, far from it. |
Good points but I think you should also consider whether Africa (big place, maybe we should consider which nations or groups of nations we are talking about) needs to rely on other parts of the World for infrastructure investment. If they have the resources that are wanted and have the bargaining nous to get a better price then they can rapidly gain traction to power their own infrastructure development.
Providing they can keep the money flowing and not just stacking up in the coffers of some very smart but ruthless military leaders... |  |
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| Anybody else think the global economy is about to go pop? on 10:00 - Oct 5 with 1374 views | Guthrum |
| Anybody else think the global economy is about to go pop? on 09:38 - Oct 5 by nodge_blue |
That's true. I think some of the points raised though is that is smells of debt problems.
A bit like the sub prime property market in the US was what looks like a contained thing.
But it becomes a trigger. |
Most certainly it's a shambles in the offing.
But Beijing has levers which Western governments can only dream of. Quantitive easing will not even be mentioned, let alone debated, just happening automatically.
Also, 2008 was a bump, not a systemic collapse. If anything, it led to a doubling-down on the fund-management economy and the coming into power of governments which backed it (through deregulation). |  |
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| Anybody else think the global economy is about to go pop? on 10:08 - Oct 5 with 1348 views | WeWereZombies |
| Anybody else think the global economy is about to go pop? on 10:00 - Oct 5 by Guthrum |
Most certainly it's a shambles in the offing.
But Beijing has levers which Western governments can only dream of. Quantitive easing will not even be mentioned, let alone debated, just happening automatically.
Also, 2008 was a bump, not a systemic collapse. If anything, it led to a doubling-down on the fund-management economy and the coming into power of governments which backed it (through deregulation). |
This expands the debate nicely. Yes, 2008 was not quite The Great Depression (although few on the forum will have lived through that so it might be difficult to compare) but I suggest that it was more than a 'bump', especially if you are, say, Greek and saw your prospects in life greatly diminish. Also, whilst most Western nations have not quite seen the rise of fascism that Europe experienced in the 1930s the tolerance of authoritarian government has grown since the Banking Crisis. | |
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| Anybody else think the global economy is about to go pop? on 10:13 - Oct 5 with 1325 views | Guthrum |
| Anybody else think the global economy is about to go pop? on 09:53 - Oct 5 by WeWereZombies |
Good points but I think you should also consider whether Africa (big place, maybe we should consider which nations or groups of nations we are talking about) needs to rely on other parts of the World for infrastructure investment. If they have the resources that are wanted and have the bargaining nous to get a better price then they can rapidly gain traction to power their own infrastructure development.
Providing they can keep the money flowing and not just stacking up in the coffers of some very smart but ruthless military leaders... |
Think China works on geological rather than political maps for their investment policies.
Most certainly African nations should have been able to leverage much better levels of infrastructure and social development, given their resources and the markets for them. But corruption, fighting over the loot and outside interference have scuppered that.
Unfortunately I can't see a reform movement gaining enough traction in the near future, especially in the face of politicised/tribalised militaries who have the power and precedent to overthrow civilian rule*.
* In Britain, there was a reaction against that type of behaviour after events during the 1650s, which lasted for three fairly crucial centuries. | |
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| Anybody else think the global economy is about to go pop? on 10:20 - Oct 5 with 1311 views | Guthrum |
| Anybody else think the global economy is about to go pop? on 10:08 - Oct 5 by WeWereZombies |
This expands the debate nicely. Yes, 2008 was not quite The Great Depression (although few on the forum will have lived through that so it might be difficult to compare) but I suggest that it was more than a 'bump', especially if you are, say, Greek and saw your prospects in life greatly diminish. Also, whilst most Western nations have not quite seen the rise of fascism that Europe experienced in the 1930s the tolerance of authoritarian government has grown since the Banking Crisis. |
I would argue that even the Great Depression was not a systemic collapse, in that the "system" emerged pretty much unscathed from the other side. Not even particularly discredited.
The effects were more social (rise and fall of populist fascism, increased development of welfare states) than economic. | |
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| Anybody else think the global economy is about to go pop? on 10:30 - Oct 5 with 1288 views | chicoazul |
Even if there was a huge shock modern neoliberal capitalism has proved its ability to survive almost anything within broad reason. So, no. |  |
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| Anybody else think the global economy is about to go pop? on 10:35 - Oct 5 with 1268 views | WeWereZombies |
| Anybody else think the global economy is about to go pop? on 10:20 - Oct 5 by Guthrum |
I would argue that even the Great Depression was not a systemic collapse, in that the "system" emerged pretty much unscathed from the other side. Not even particularly discredited.
The effects were more social (rise and fall of populist fascism, increased development of welfare states) than economic. |
But the social change feeds into the economy, the rise of the Welfare State under the Attlee government gave a wider spending power to the working and lower middle classes, which in turn changed the the profile of the type of goods being bought. Although we also have to factor in availability of new types of domestic appliances that were often made overseas - which had a knock on effect on the balance of payments. | |
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| Anybody else think the global economy is about to go pop? on 10:36 - Oct 5 with 1266 views | nodge_blue |
| Anybody else think the global economy is about to go pop? on 10:20 - Oct 5 by Guthrum |
I would argue that even the Great Depression was not a systemic collapse, in that the "system" emerged pretty much unscathed from the other side. Not even particularly discredited.
The effects were more social (rise and fall of populist fascism, increased development of welfare states) than economic. |
Reasonable points. That huge depression didnt result in the collapse of capitalism. But it did cause huge hardships for working class people. Thats back to the original post which is seeing something like this again as a reset and a path to the light. Which its not. |  |
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| Anybody else think the global economy is about to go pop? on 10:41 - Oct 5 with 1249 views | Guthrum |
| Anybody else think the global economy is about to go pop? on 10:35 - Oct 5 by WeWereZombies |
But the social change feeds into the economy, the rise of the Welfare State under the Attlee government gave a wider spending power to the working and lower middle classes, which in turn changed the the profile of the type of goods being bought. Although we also have to factor in availability of new types of domestic appliances that were often made overseas - which had a knock on effect on the balance of payments. |
Indeed. But that actually fed the system. Eventually, workers ended up with sufficient disposable income to become investors themselves, as savers, through pension funds or as endowment mortgage holders. | |
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| Anybody else think the global economy is about to go pop? on 10:49 - Oct 5 with 1239 views | Guthrum |
| Anybody else think the global economy is about to go pop? on 10:36 - Oct 5 by nodge_blue |
Reasonable points. That huge depression didnt result in the collapse of capitalism. But it did cause huge hardships for working class people. Thats back to the original post which is seeing something like this again as a reset and a path to the light. Which its not. |
That is the problem with revolutions.
They're often laudable causes, seeking to overthrow tyrrany or incompetence. But, when things do not go smoothly, descend into crisis and terror as the instigators lack the ability (or realistic environment) to make their promises come true. Followed by a "saviour dictatorship" and eventually a reaction back to something like the status quo ante.
Frequently with a lot of people dead or economically ruined in the process. | |
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| Anybody else think the global economy is about to go pop? on 11:07 - Oct 5 with 1225 views | WeWereZombies |
| Anybody else think the global economy is about to go pop? on 10:41 - Oct 5 by Guthrum |
Indeed. But that actually fed the system. Eventually, workers ended up with sufficient disposable income to become investors themselves, as savers, through pension funds or as endowment mortgage holders. |
Although some of the pioneers of pension funds were in Japan, whose introspective World view and nation first politics were enabled with the money to build a powerful military machine. Today one of the big problems for an ethical investor is finding a fund that performs but does not give money to the development and diffusion of armaments. | |
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| Anybody else think the global economy is about to go pop? on 11:41 - Oct 5 with 1179 views | homer_123 |
As others have postured.
It might but I doubt Capitalism will disappear as a result. All it would do is widen the gap between the haves and have nots. |  |
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| Anybody else think the global economy is about to go pop? on 11:43 - Oct 5 with 1178 views | SuperKieranMcKenna |
I posted about this the other day but western companies and institutions are reducing their exposure to China. Dear Leader Xi is driving out FDI and pursuing ideology over economic growth. I don’t think they are likely to bring the whole global economy crashing down. Perhaps a partial reset of globalisation.
More immediate concerns in the west are sticky inflation and the interest rates pushing many countries into recession. Mortgage arrears are at a 7 year high in the UK, and the BoE will now have to balance increasing rates further to prop up sterling, with pushing them too far and creating a deep recession. |  | | |
| Anybody else think the global economy is about to go pop? on 11:44 - Oct 5 with 1173 views | NthQldITFC |
To my (admittedly simplistic) way of thinking, we have to try something different or die doing the same old thing.
That will mean hardship, and it will mean truthful and open communication and social connectivity and civil strength overcoming the tired old perpetual growth institutions 'this time' but ultimately there's no choice. It's just a question of when. Better, and easier now. |  |
| # WE ARE STEALING THE FUTURE FROM OUR CHILDREN --- WE MUST CHANGE COURSE # | | Poll: | It's driving me nuts |
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| Anybody else think the global economy is about to go pop? on 11:47 - Oct 5 with 1154 views | ElephantintheRoom |
No. Don’t believe all you read in comics | |
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| Anybody else think the global economy is about to go pop? on 12:06 - Oct 5 with 1130 views | SuperKieranMcKenna |
| Anybody else think the global economy is about to go pop? on 11:07 - Oct 5 by WeWereZombies |
Although some of the pioneers of pension funds were in Japan, whose introspective World view and nation first politics were enabled with the money to build a powerful military machine. Today one of the big problems for an ethical investor is finding a fund that performs but does not give money to the development and diffusion of armaments. |
“Today one of the big problems for an ethical investor is finding a fund that performs but does not give money to the development and diffusion of armaments.”
On the other end of the scale (depressingly), there are concerns in the US of investors bringing class actions against the Boards of firms who pursue ESG initiatives (on the belief ESG actions are detrimental to ROI). | | | |
| Anybody else think the global economy is about to go pop? on 12:30 - Oct 5 with 1096 views | CoachRob |
| Anybody else think the global economy is about to go pop? on 11:44 - Oct 5 by NthQldITFC |
To my (admittedly simplistic) way of thinking, we have to try something different or die doing the same old thing.
That will mean hardship, and it will mean truthful and open communication and social connectivity and civil strength overcoming the tired old perpetual growth institutions 'this time' but ultimately there's no choice. It's just a question of when. Better, and easier now. |
There is this prevailing sense from most people that the current system can't fail, that collapse is impossible - it is implicit in the IAM's that economists produce. You can whack the temperature above the level that any complex life could exist and capitalism carries on without us.
The fossil fuel bounty from the Carboniferous Period will be unable to sustain civilisation forever and so in the long term there doesn't seem any other option than what you suggest that meets the challenge of the climate and ecological crisis.
I do find it interesting that nobody can tell us what direction the global economy is heading. What direction will the global economy be heading in 2024? Some people have posited a few ideas that all seem rather ad-hoc, but after all these years of capitalism we still don't know how it works, or in your case, how to get rid of it. |  | | |
| Anybody else think the global economy is about to go pop? on 12:55 - Oct 5 with 1059 views | urbanblue |
| Anybody else think the global economy is about to go pop? on 08:39 - Oct 5 by Darth_Koont |
Agreed. I think that’s mostly down to a belief that companies are too important to fail and therefore the measures taken in the event of an economic crash are predominantly about propping them up. So the cycle — and the widening inequality — continues.
But that’s still kicking the can down the road.
Although it could be more efficient and fairer, I don’t see any real problem with the underlying framework of the global economy and the needed opportunities and benefits that it gives developing economies and societies. The big problem is what is happening with developed economies and the large corporations that can then dominate globally. For want of a better analogy, these companies are “juiced” with increasing financialisation and “market valuations” that bear less and less relation to actual performance and value generated. I’d say these companies are more value suckers these days boosting profits and shareholder returns on their own terms and in their own interests. None of which is sustainable in the long term without bailouts.
We are at a point where we could and should be looking at how the economy serves the wider population and the health of society. “Good for business, good for society” doesn’t actually work that well in practice and, as you say, the negative effects disproportionately affect the worst off and the positive effects disproportionately disappear into a minority’s already flush pockets. |
'None of which is sustainable in the long term without bailouts.'
My concern is that Bail Ins will be the thing if, probably when, things go t1ts up! In that case it could get very ugly. |  | | |
| Anybody else think the global economy is about to go pop? on 15:10 - Oct 5 with 999 views | Darth_Koont |
| Anybody else think the global economy is about to go pop? on 11:44 - Oct 5 by NthQldITFC |
To my (admittedly simplistic) way of thinking, we have to try something different or die doing the same old thing.
That will mean hardship, and it will mean truthful and open communication and social connectivity and civil strength overcoming the tired old perpetual growth institutions 'this time' but ultimately there's no choice. It's just a question of when. Better, and easier now. |
Certainly sacrifices made earlier will be much easier to deal with than what’s down the line for the next generations.
We always say as people that we’d do anything for our kids and their future — but evidently those are just words we like to tell ourselves. |  |
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| Anybody else think the global economy is about to go pop? on 17:26 - Oct 5 with 940 views | BanksterDebtSlave |
It is good to see that a debate on the subject has followed the earlier personal attacks based on assumptions on my motives and beliefs.(Some might call them ad hominem in nature) | |
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