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Thread: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

  1. #616
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Quote Originally Posted by barrym View Post
    Cass, that blog is old capitalist thinking, if you follow Mason's line of thinking. Personally, I have difficulties with both viewpoints. If one takes a historic view of economic development then the current situation can be traced to the dropping of the gold standard. There is just too much money sloshing about and it is easier to play around with the marginal changes and differences in "the market" than make capital investments.
    I have to confess not having read Mason on this, but having read much of him otherwise, I wouldn't expect a Marxist viewpoint. I will make the effort, though, thanks for the nudge.

    I agree that the dropping of the gold standard was a big moment, but it was dropped for a reason. World War 1 really for me marked the end of capitalism as the progressive force that is previously was. Too many of millions of dead in the cause of redistributing and scrapping over colonies to exploit. It was pretty well one crisis and/or war after another from then on.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  2. #617
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Quote Originally Posted by pluralist View Post
    It may be interesting to note that Joe Higgins' Alternative Report on the Banking Crisis refers to this Marxist view about declining average rates in profit in capitalism, on page 35 of his report.

    http://antiausterityalliance.ie/wp-c...ng-inquiry.pdf

    While its probably true that many capitalist enterprises don't monitor or calculate this factor at a firm level, capitalist economists and writers have in fact explained the phenomenon as being part of industry life cycles:

    http://www.inc.com/encyclopedia/indu...ife-cycle.html

    You will not in general find industries where super-normal profits are made over the long term. If you do, it is often because the industry benefits from state protections!

    Apple continues to generate huge profits, but it has shifted its emphasis from PCs to phone technology.

    By contrast, most of Apple's competitors in the 1980s are long gone, or making modest returns (look at how cheap a home PC or laptop can be bought for nowadays, or indeed the example of Nokia that you already mention, in phones).
    Marx showed a tendency in capitalism as a whole (total agglomeration of all activity globally) for the average rate of profit to decline. This being averaged out across all capital, not within individual firms. So in spite of some firms - usually early comers to the market or near monopolies - make high profits - most others do not. It is certainly useful to look at lifecycle issues to see why the average declines - research, product development, marketing, distribution, storage, and eventual failure of outdated/superceded products all drag proft down, as of course to wage increases, the increased amount tied up in machinery and in development of machiner, and taxes.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  3. #618
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Everything but the kitchen sink fell by 4-5% following the Trump victory, except gold which is up 5%.

    Combined with Brexit, the expectation is global trade war and a shrinkage in world trade.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  4. #619
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Interesting to see a rightward swing in the US, UK and possibly France next year, countries, that although felt the effects of the economic crash, didn't have the same level of austerity as some of the smaller countries. The three mentioned above, imperial nations (past and present), issues with immigration seem to come to the fore more.

    Spain (I know Podemos didn't sweep to victory), Greece (granted Syriza capitulated) and Ireland (not a perfect example), all faced brutal austerity and saw a swing, if not to the left wing movements, then to independents.

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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Hard to know now what Full Fledged Panic actually means. I distrust the reaction of the "markets" even more than I did before. Since Trump happened at 04.00 GMT, the only open market of any significance was Japan, where panic set in - on the basis of what? - nothing, it reset 12 hours later. I heard a commentary that most of the 4am reaction was computers, not people. The traders ( the bookies) were delighted, a right wing loonie - great, we'll line our pockets for the 2016 bonus and probably 2017 and then drop off in 2018 when nothing happens.

  6. #621
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Quote Originally Posted by barrym View Post
    Hard to know now what Full Fledged Panic actually means. I distrust the reaction of the "markets" even more than I did before. Since Trump happened at 04.00 GMT, the only open market of any significance was Japan, where panic set in - on the basis of what? - nothing, it reset 12 hours later. I heard a commentary that most of the 4am reaction was computers, not people. The traders ( the bookies) were delighted, a right wing loonie - great, we'll line our pockets for the 2016 bonus and probably 2017 and then drop off in 2018 when nothing happens.
    The panic of the title at this stage is historic. There have been several panics since it started. I would be happy to remove the first three words of the thread title but it might cause confusion? The notion that global capitalism in running out of road is being confirmed by both economic and political events.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Sean O'Rourke interviewed James Rickards last week.( Sean O Rourke 30/11/2016.)

    He is a man with a book to sell,
    “The Road to Ruin”, and it all came across in his 2 minutes as a bit glib, but not wrong.

    The next crisis he says is more or less due. 2018 - why not?
    Financial crashes are cyclical - there was one in 2008 and one in 1998.

    This one will be worse. Why ?

    Complexity theory. Risk goes up exponentially with increased size of the system.
    Who will bail out the Central Banks – there is no back stop that they were able to provide in 2008.

    IMF is the only backstop
    -Special Drawing Rights – the IMF can print money.

    The Global Elite is ready for next financial crisis. Lagarde Lipton Draghi Larry Summers Adair Turner Anatole Kileski.
    Several hundred people in institutions will decide what to do.

    Cyprus 2012 bail-in was a template - there will be no more depositor rescues.
    G20 Brisbane 2014 decided - no more bailouts . New template is bail in. Depositors.

    The new crisis can be seen alread -
    Playing out in Italy, Deutsche Bank.

    India – banks closing now.

    Trump – low taxes – to 15% less regulation infrastructure spending – Reagan did this.
    Debt to GDP 35% now 105% Now there is no inflation.

    Increasing pressure on corporations.
    Heads of State and corporations are a bit at war. States want to impose a global tax ID to each company. Global data base.

    Rickards says that the effect of bail-in would be global panic and banks closure - the dollar would go as reserve currency - IMF would have to print money.

    Kurt Vonnegut Cat’s Cradle – doomsday machine.
    Planet freezer.
    In a panic everyone wants their money back.
    1933 1931...
    The conversation continued with O'Rourke sounding worried - what should people do to prepare for this ? Tinned food?

    (That might sound bizarre in some countries, but it is a norm in the US and Australia that people have a store cupboard.)

    Savers, Put 10% in silver or gold. 50 oz of silver. Tinned food. Water, batteries, flashlights, fuel, cash.

    O.K. We can't say we haven't been told.

    Has anyone here read this book ?
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  8. #623
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Rubbish. Who saved tinned food in Ireland in 2008? I saw the other day that new car orders for Jan 2017 are up 16%. If the banks have no money for houses where is the car loan money coming from?? There is,and has been, money somewhere, there is almost no evidence of the "crisis" of 2008 and the effect of austerity in the predictions for spending this "fest season" - unless, of course you are in a hotel 'cos you're homeless. Don't forget to make a contribution to McVerry or Focus or someone before you buy your first pint.

    (copy this post to the housing crisis thread, same thing applies there)

  9. #624
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    Quote Originally Posted by barrym View Post
    Rubbish. Who saved tinned food in Ireland in 2008? I saw the other day that new car orders for Jan 2017 are up 16%. If the banks have no money for houses where is the car loan money coming from?? There is,and has been, money somewhere, there is almost no evidence of the "crisis" of 2008 and the effect of austerity in the predictions for spending this "fest season" - unless, of course you are in a hotel 'cos you're homeless. Don't forget to make a contribution to McVerry or Focus or someone before you buy your first pint.

    (copy this post to the housing crisis thread, same thing applies there)
    Glad you see people around you doing Ok, barrym, but I assure you very many are not. After 2008 many food cupboards were scraped out for the last spilled handful of porridge.

    I do agree with you that homelessness is in a league of its own, as a problem - imposed ideologically to be honest. We paid tens of thousands of skilled builders to be idle while the housing lists were rocketing. And we are still doing it.

    The book does not sound impressive though I would agree. Another guy wanting to make money out of catastrophism.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  10. #625
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    Default Re: "Full Fledged Panic" - World Economic Crisis Moving to a New Stage - Global Capitalism Running Out of Road

    The next stage of the world crisis is trade war. Today the EU is announcing retaliatory tarriffs against US imports, after Trump's steep tarriff increases against EU products. Historically, trade war is only one step ahead of actual war. Export reliant countries in the EU, and Canada, stand to be hit. China is simply not in the position to cut its alleged trade deficit with the US by 200 billion. The US, on the face of it, has nothing much to lose as it is in trade deficit, but in reality, trade war is deeply damaging to industrial growth and would hit the US too.

    The European Union will launch a raft of retaliatory tariffs against US exports on Friday, a top official has said.
    The move comes after US President Donald Trump imposed steep duties on steel and aluminium earlier this month.
    American exports such as blue jeans, motorbikes and bourbon whiskey will be targeted, trade commissioner Cecilia Malmstrom confirmed.
    However, she said the bloc "did not want to be in this position".
    "The unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice," she said.


    Brussels drew up the list of products in March when Mr Trump initially proposed the 25% tariffs on steel imports and 10% on aluminium, which also target Canada, Mexico and other close US allies.
    Cranberries, orange juice, sweetcorn and peanut butter are among the other goods targeted.
    It comes amid an intensifying row over trade between the US and its partners.
    https://www.bbc.com/news/business-44549712

    https://www.cnbc.com/2018/05/22/trum...mpossible.html

    Taken together with Trump's 'War on Babies' the situation is set for intensified nationalism of the extreme kind.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

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