Analysis of the 21st Century World Recession;
the Global Financial/Economic Crisis
FULL detail of the Analysis of 21st Century World Recession
by Russell G H Mathews BCom BSc(maths) LLB BA(maths) See details
I make no pretense at fully understanding the 'global economy'. However, my thesis is that no-one else does either.
No-one understand how ALL the variables in this multi-variable model inter-relate. I doubt that anyone can even enumerate them all, let alone even count them all, or how they inter-relate. It is human nature to attempt to make order out of disorder. It is easy enough to start naming variable/parameters of our economy or global economy: interest rate, unemployment rate, standard hours worked per week, exchange rate, cpi, 'inflation rate', tax rates, volume of money, debt levels, quantum of foreign debt, ... It is not then difficult to 'measure' some of these variables and then 'model' how they inter-relate. Keynes did this in the wake of the 'Great Depression' nominally beginning in 1929. These would be 'theorists' then make the unvalidated assumption, which I proffer is incapable of validation of ceteris paribus; All else being equal.
The economy was in a state of 'Dynamic Equilibrium'.
World political leaders then pontificate that they understand the reasons for the Global Financial Crisis, [really Global Economic Crisis], and importantly how to overcome it. We have all heard all world leaders admit that they do not understand what is happening, not. So much for the TRUTH, THE WHOLE TRUTH & NOTHING BUT THE TRUTH. Clearly, they are liars. That is corruption and it is corruption, on a global scale, that has got us into this global mess. The corruption preceded 'sub-prime mortgages'.
The linchpin is 'PRODUCTION'. That is the important variable. The PRIME VARIABLE is NOT, money supply, consumption, debt level,
For many years now there has been a 'consumption splurge' in the western world. Consumption was too high by common agreement. Citizens were encouraged by governments to consume less, and save more. Governments were limited in what they could supply without 'overheating' the economies of the world. If governments tried to supply the items in the nature of capital goods/infrastructure that they should have been supplying, that would have created excess demand so driving up the 'inflation' rate. Citizens were not of a frame of mind to save more.
Now, those governments have their wish; consumers who are prepared to consume less, & SAVE MORE, yet the governments of the world gravitate to mass hand wringing. Governments of the world now have the opportunity to increase their spending on 'capital good' [ie other than 'single use' goods], and infrastructure, but are stuffing around instead, resembling headless chooks.
The morons in government around the world were heard to say, "How will we pay for it?" With MONEY. "Okay, but from where will we obtain this extra money?" Borrow it from the people who are saving it in the banks that the government has guaranteed, or from those banks..
This recession being experienced by the world now in April, 2009 will not be over soon. The 'governments' of the world, including the UN, IMF etc are responsible for this economic mess. The basic cause if FRAUD & CORRUPTION. Even within national economies, sectors are interdependent. Hence, provision of finance affects so many other sectors. For instance, to 'favour' on sector of the economy, say the motor vehicle industry, is to necessarily disadvantage another sector or sectors of that economy, and importantly, lead to a less than ideal allocation of resources. The ones disadvantaged are the less vocal. This is the slippery slope. The extent of this 'favouring' is exacerbated, to the extent that it or aspects of it can be kept confidential/secret. The Internet can have a major impact on diminishing the extent to which FRAUD & CORRUPTION can be kept secret. The internet will also have a major effect on discussion disproving so much government 'spin'.
There is so much wrong with the economies of the world. There are at present many major structural flaws [the term 'inefficiencies' doesn't really cut it], in the basics of many economies. Investors and 'p[layers' in the various economies cannothave complete faith in any economy while these basic flaws persist. The economic 'times' are unlikely to improve while governments favour [prop-up] inefficient industries such as motor vehicle manufacture.
A major shift in the economies of the world, the effects of which are barely evident at present. That is basically due to the advent of the Internet. The Internet will change the very nature of 'work'. Air travel for intercity 'meetings' will be much curtailed due to the increasing intrusion of 'video conferencing'. Working from home is increasing quite rapidly at present. The rate is accelerating. This will continue. This will greatly reduce the amount of travel and all the consequent disadvantages of travel, and commuting.
Because of the Internet, the world will never be the same as it has been, ever again. The populations of the world will come to realize this, and will have no confidence in any politician who says to trust him, and that it, "the great recession", will soon be over.
FULL detail of the Analysis of 21st Century World Recession
by russellm » Tue Jan 13, 2009 3:42 am
This board of FORUMS is for the purpose of accommodating a COMMUNITY of internet users with an interest in MAKING MONEY, a LIVING, from the internet; from the enjoyment of 'OPERATING ON THE INTERNET'. OH YEAH!!!!
History shows how technological change has caused revolutions in human behaviour. The concept of economies of scale was important in the Industrial revolution, and so people moved off rural settlements to cramped industrial centres. Mental attitude changed to considering large scale centralized processing. The advent of the motor vehicle added further to this centralized processing paradigm. However, full cost was not considered.
We are about to experience the THE INTERNET caused SHOPPING REVOLUTION. The rate of change to this will be exacerbated by, and may in turn further accelerate the 'Global Financial Crisis'. Time will tell.
The non-optimization processes that resulted from this 'economies of scale' mind set are now being more readily understood. The full costing paradigm applies the principles of bio-mimicry is exemplified in
'The SIMPLE PERMANENT SOLUTION to our water crisis', 'The days of the sewerage system are numbered' and
'Invitation to Individuals in Australia who wish to be involved in this concept: to JOIN the COMPOSTING COMMUNITY'.
'Distributed processing' is synonymous with bio-mimicry and is the reality of the internet.
Because the internet has such low marginal operating costs, effectively zero, means that almost everything which can be performed in conjunction with some involvement of the internet, will be done with the involvement of the internet as that will be more efficient; more for less. This means the avenues available on the internet are almost limitless.
Have fun!
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