Much has been written about the crisis. But let's now look at a slightly "different" view of why there is a crisis and whether we should try to get out of it. And what the crisis means in the future.
Have you heard anything about "economic cycle"?
The market economy is not developing smoothly. It has many "self-cleansing" and "preventive-learning" processes that constantly improve the economy as such. I once heard from a well-known American investor (I don't remember the name) that the American businessman who never went bankrupt he is not the right and good trader. This thesis could be agreed globally. Why? Because bankruptcy is experience. It's an opportunity to look back and say, "What I did wrong." Bankruptcy is a moral lesson. It shows that caution and restraint are needed in every situation.
After all, after a drunken night, a hangover comes.
It is similar with the economic cycle. For some time the economy has been growing, growing beyond the "potential" of the economy. There is "investment optimism", it is here treewhen everyone invests in everything, everything (it seems) makes money. Everything is (seems) good investment. Inflation usually rises, which contributes to fogging of signals on the market. Investors get "false information", multiply bad investment. Then the consequences of high inflation and the inflation spiral will begin to manifest, unemployment will rise, interest rates will rise, poor investment from the boom period will prove to be really bad. The economy will turn into a recession, a depression - in other words, into a downturn. GDP is falling below the potential of the economy.
There will be bankruptcies, the liquidation of uncompetitive companies. Those who did not save in the previous period will not survive. Those who were not careful will lose a lot. It is great lessonwhich gives people the experience that savings are important, that things need to be handled as emotionally as possible, rationally. The recession is what brings us back to reality, what shows us that we are vulnerable.
But what has happened in the last few decades? States have intervened tremendously in the economies. In recent history, we can hardly find a similar period when states would determine the rules of the game so strongly. States intervened for very populist reasons - they wanted to thank the masses, promising "infinite prosperity, infinite growth."
Thanks to the intellectual environment of the fifties increased state supervision of the economy. The rate of redistribution has increased, states have moved to a position where they have never been before should not be. Then, when the first signs of a recession came to show that the "king is naked" and to point out the mistakes made by those who set the rules of the game, politicians realized that it would mean something to them. loss of power. Expanding state oversight of the economy and increasing the rate of redistribution has given politicians tremendous powerthat politicians they did not want to give up. They used this power and, whenever there was only a hint of a recession, they "attacked" the economic cycle and various instruments. natural development were interrupted.
That's how politicians created it illusionthat they have fulfilled their promise "endless prosperity and growth"Which gave them arguments to justify further state intervention in the economy, a further increase in the rate of redistribution. That "natural recession" still so they rolled in front of them like a snowballwhich kept growing. The national debts of all the countries of the world are actually the price of this snowball, because it is precisely those unjustifiable state interventions that have burdened state budgets so incredibly.
People thus became convinced that there was nothing to fear, that there was no need to make savings, that there was no need for caution. It's awesome global moral hazard.
We don't have to go far into the past to show the effect of a snowball. At the turn of the millennium, it experienced a huge boom and subsequent decline NASDAQ, the US technology exchange - the largest of its kind in the world. A recession was expected, but due to de facto state intervention (with the assistance of the de facto private cartel of the Fed), a more serious recession did not come. At that time, they took as their shares and investment to technology companies, especially those that were active in the then beginning of the Internet. Sure, it would take something else with it, but the slump wouldn't be as severe as it is today. Politicians, however, - for the above reasons - recession they did not wish. So it went on, until about somewhere until 2007, when she got a snowball she pointed again. The first speech was credit and mortgage crisis, which, however, subsequently took with it the entire financial sector and subsequently almost the entire economy of the world. Impact was (is) much greater than the impact at the turn of the millennium in the event of a "technological crisis".
And yet the states again withwill experience a natural evolution cut through. Once again, it is trying to use various "rescue packages" to so-called "help" the economy, and this is nothing more than a further increase in government debt than another increase in global moral hazardthan a further magnification of that "snowball" than by moving the recession to the futureso that it does not accidentally tarnish the political career of contemporary politicians. Such selfishness!
There is nothing going on but that accumulate repressed crises and recessions from the past (= enlarging the snowball), which becomes unmanageable for states and governments. If we constantly avoid what must one day come, one day there will come a time when states will no longer have enough oversight of the economy to prevent one "super-recession", when it will manifest itself. all the recessions of the past. At that moment, there will be an impact vast.
However, before that super-recession occurs, the weight of the snowball of accumulated recessions from the past will constantly magnify. Politicians - to avoid the "scar on their careers" - will increase the number of regulations and his de facto powerso that they can fight against natural evolution. Already today, there is a call in Europe for a "euro-rating" agency, because many does not like the bad rating of Greece. However, one day there will come a time when even almost one hundred percent control of the economy it will not be enough for politicians to push back the super-recession. It will be a moment when no one will want to lend money to states to maintain "frozen and unchanging markets". At that point, we will have at least two solutions available - and neither is very positive.
I'll start with the worst.
The first scenario assumes that politicians will not want to lose their influence and power. And at the same time that they will not want to admit mistakes from the past. It will mean only one thing - states will not "recognize" debts. They will argue with the "immorality" of debts and interest, the "outrageous usury" and, in the end, throw the whole situation at the creditors. The system will find the enemy. Politicians will use their influence to leave those who do not "submit" and give up their claims. The economy will be completely nationalized, private property will be suppressed. There will be a centralization of power, a redistribution of almost XNUMX% and, at the same time, a great economic decline. However, the whole thing will be called "building a better tomorrow" without "immoral indebtedness" when "everyone will be beautiful" and when "everyone will be able to achieve a high standard of living". Newspeak version of the loss of personal freedoms and the right to private property. De facto slavery occurs.
The precondition for fulfilling the first scenario is - if possible - one global government or at least the smallest possible number of governments, ie strong centralization of power, in order to suppress the risk that a government in a country will resist in this direction. I am afraid that today's shape of the European Union and global development is moving towards this.
The second scenario is less catastrophic. He assumes that markets will be faster than the action of states. The willingness to lend to states will disappear before the market is controlled almost XNUMX%. Thus, politicians will not have the influence to act outside the established economic framework. Money will be printed, hyperinflation will take place, people's property will be destroyed. Confidence in political government will be completely lost and its influence will be reduced. We will go through that super-recession, "we will wash in a snowball" and the natural course of things will be reintroduced. Such a strong lesson for us for a long time heals from confidence in the correctness of redistribution and great political power.
Will we really let it go that far?