Is capitalism facing it's own Berlin Wall crisis soon?

[Lord Beria3]

I ask because having read Ambrose's latest article on the Torygraph, it's made me wonder whether the coming financial reckoning will finally destroy the political sustainability of the current BAU.

http://www.telegraph.co.uk/business/201 ... al-crises/

The Institute of International Finance in Washington released figures showing that global debt has reached $217 trillion (£168 trillion).

This is 327pc of world GDP. It is up from 276pc in 2007 – shortly before the western financial system collapsed – and up from 246pc fifteen years ago.

Claudio Borio from the Bank for International Settlements (BIS) – the high priest of monetary orthodoxy – said nobody knows how long this can go on or what it will look like when the denouement arrives, but arrive it will.

"Financial booms can't go on indefinitely. They can fall under their own weight, � he told The Telegraph earlier.

Unbridled debt-creation pulled forward prosperity from the future. The corrosive effect of this 'intertemporal misalignment' is that real rates must fall ever lower at the trough of each cycle, until they are so deeply negative that they cannot fall any further. That is more or less where we are today. There is no road left.

The situation is now so precarious that some of us who were monetary hawks when it all began were later forced by circumstances to become doves, because the alternative for society is too awful to contemplate.

So let us be clear. The Fed caused the dotcom bubble in the 1990s. It caused the pre-Lehman subprime bubble. Whatever Ms Yellen professes, it has already baked another crisis into the pie. The next downturn may be so intractable that it calls into question the political survival of capitalism. The Faustian pact is closing in.

Before you all start cracking open the champagne, I would warn that the political backlash against liberal free markets/capitalism could turn in ways not friendly to the Left.

We have already seen that with Brexit where the referendum result shocked alleged "radicals" who are now desperately trying to remain members of the single market, that bastion of European capitalism.

A return of protectionism with radical right governments in power using the state to protect key strategic industries, including heavy industry and farming from the rest of the world is more likely then a Socialist paradise.

[Little John]

Cracking open the champagne or not cracking open the champagne - it makes no difference. "Perpetual" economic growth is over. A debt-based monetary system is over. Capitalism is over. The current centre will not hold.

So, it is an inevitability that an extreme political response is coming and it doesn't matter if one wants that or not. It is coming. As a common man, the question I must simply ask myself is this: Is an extreme right response or an extreme left response better or worse for the future of me and mine. For me, that's a really easy question to answer. Though, I am bound to admit, the Left has some way to go yet in terms of facing up to some of the very hard choices heading our way.

It seems to me that there are only two kinds of people who might wish for an extreme right response - millionaires and morons. For anyone wishing this outcome but who is unsure which kind they are, I suggest they take a look in their wallets.

[RenewableCandy]

<Cracks open home-made Elderflower Champers regardless, on a 'while ye may' basis...>

[emordnilap]

No doubt they'll keep the debt plates in the air a short while longer by taking over more and more assets; there's still a few to go! Where TTIP failed, fear will win.

[emordnilap]

The fish will run out eventually.

[emordnilap]

Is capitalism facing it's own Berlin Wall crisis soon?

Its.

[kenneal - lagger]

The present monetary system, based on debt created money, wiwll soon hit the buffers as people's debt becomes unsupportable. Also because a relatively few extremely rich people are accumulating ever increasing amounts of money the money available to the rest of us will decrease as new money isn't being created to keep the wheels of the economic system turning.

Capitalism isn't so much the problem but our current system of Corporatism is. Inefficiency under capitalism is punished by the loss of the business. Under Corporatism, where businesses have been allowed to become so large that they cannot be allowed to fail, inefficient businesses are propped up by the taxpayer instead of being broken up and the good bits sold on as profitable concerns.

Because these ultra large businesses hold so much economic and political power they are controlling the way that government is run and taxes are levied. These businesses are no longer paying enough tax to pay for the basic scientific research which guarantees their future earnings, the health care which guarantees the health of their current employees and the schools and universities which guarantee the education of their of their future employees. They are pushing these additional costs onto their employees, while at the same time, reducing the remuneration of those same employees.

To say that our Kleptocracy are short sighted idiots is doing them a favour.

[emordnilap]

Good summary k-l. Bang on the money.

[kenneal - lagger]

And while the grammar police are on the prowl

farming from the rest of the world is more likely then a Socialist paradise.

"Than" is the comparative.

The quote says that there will be farming from the rest of the world followed by a socialist paradise.

[emordnilap]

Well, they're called grammar nazis too and the thread title is...

[PS_RalphW]

Computer programming suffers the same way. Languages and libraries are constantly evolving, and different ones become fashionable. It is hard to keep up to date with the latest fashions. Once you fall behind, it can take a year or two on the job to get up to speed again. Given this, you would think employers would offer continual training to staff, or take on staff with experience in other areas and train them up, perhaps at a reduced wage. They NEVER do. They all prefer to offer silly money wages to the tiny number of programmers lucky to have fashionable skills, who then get poached by the next start-up with a better bonus package, and as a result all teams are under staffed and overworked, deadlines are missed and quality suffers.

Also, 92% (according to BBC) are male. Agism is also universal.

By my age, you are project leader at least, or you are unemployable.

[clv101]

That's a good observation about failure of staff development leading to silly money.

[Little John]

Computer programming suffers the same way. Languages and libraries are constantly evolving, and different ones become fashionable. It is hard to keep up to date with the latest fashions. Once you fall behind, it can take a year or two on the job to get up to speed again. Given this, you would think employers would offer continual training to staff, or take on staff with experience in other areas and train them up, perhaps at a reduced wage. They NEVER do. They all prefer to offer silly money wages to the tiny number of programmers lucky to have fashionable skills, who then get poached by the next start-up with a better bonus package, and as a result all teams are under staffed and overworked, deadlines are missed and quality suffers.

Also, 92% (according to BBC) are male. Agism is also universal.

By my age, you are project leader at least, or you are unemployable.

They are predominantly male and young because the rapid developments in coding require an agile mind and coding, per-se, also lends itself well to people on the autistic spectrum who are significantly over-represented in males. This is not 100% true 100% of the time, of course. But, it is sufficiently often true that there is a clearly identifiable and inevitable pattern in the demography of the workforce. All of which inevitably leads to a working environment that is less socially warm than in many other sectors, Which makes it even less likely that women (which research clearly shows) will chose to work in it due to that relative lack of social warmth in the workplace.

These are just facts on the ground.

Nobody is being discriminated against, save for the fact of raw economics driving that discrimination coupled with significant self-selection. We may as well say women and old people are being "discriminated against" because construction companies predominantly tend to employ young strong males to be hod-carriers.

A much bigger and more intractable problem is the off-shoring of coding to other countries where the cost of labour is significantly lower. But, this seems to be more or less unavoidable due to the electronically transportable nature of code.

[emordnilap]

Kind-of aside, I was reading how bots can now do 'reviews'. You name it, products, books, articles, opinions, restaurants, videos, all computer generated with whatever bias the owner dictates and given soft, human grammar.

Bots on dating sites are particularly interesting.

This internet thing is fun!

[emordnilap]

Maybe we are hitting a wall at last.