Global economy to shrink for first time since the Second World War

[BrilloPad]

When I see someone who runs a bank twittering on about naughty people saving money, it does make me smile. If people had done more saving and less borrowing over the last 10 years, we wouldn't be in half as much shyte as we are.

I think they are supposed to save : but in a bank.

HTH

[dang65]

Bad news. It's a symptom of a fecked up economy.

HTH

So why are we being lectured now about how the constant growth of the global economy was a bad thing over the last decade or so? Are both options bad?

[Doggy Styles]

So why are we being lectured now about how the constant growth of the global economy was a bad thing over the last decade or so? Are both options bad?

No. Steady growth is a good thing.

The constant "growth" over the past decade was a bad thing because it wasn't real growth at all. It was only achieved through people borrowing to spend without paying it back, and through government borrowing to spend on public services and other projects.

It was like achieving good sales figures by buying half your stock yourself. You have to constantly increase your borrowing to keep that up, which is clearly unsustainable.

[dang65]

No. Steady growth is a good thing.

The constant "growth" over the past decade was a bad thing because it wasn't real growth at all.

But it was still counted as "growth" all that time, wasn't it? If that wasn't in fact real growth at all but what we have now is real, then we're probably actually really growing in comparison with the point we were at before the fake growth started. So we're not really shrinking, in real terms, and probably have a long way to go before we do shrink, if one looks at it like that.

[PM-Junkie]

But it was still counted as "growth" all that time, wasn't it? If that wasn't in fact real growth at all but what we have now is real, then we're probably actually really growing in comparison with the point we were at before the fake growth started. So we're not really shrinking, in real terms, and probably have a long way to go before we do shrink, if one looks at it like that.

Not quite. It was only counted as real growth by the snot goblin and his fans.

If you equate it to your houshold buget, it's like buying lots of stuff on your credit cards but making no attempt to pay your cards off. You sit there and say "oo...look at all these goodies. Aren't I doing well".

But then your income drops, and you can't maintain your commitments. So you say "I have been really good at running my budget because look, I don't have any bank loans....so I'll borrow money off the bank to keep myself going". Everyone but you will know that you are talking out of your butt because you've ignored all your credit card debt, and the things you've bought haven't actually increasing your net worth. So everyone laughs at you for talking nonsense and thinking nobody can see what you've actually done, and for not saving money when you could have done.

Well, so goes the British economy under the snot goblin and that's why we're far worse off than he tries to claim.

[Solidec]

Two points i would like to make.

1. The financial system is called a fiat money system and relies on ever increasing debt for it to continue functioning. 1st PROBLEM!

2. For the last 20 years inflation has been grossly misreported by the west through the use of terrible fudging of how the cost of goods are calculated and what goods are deemed suitable in the basket that is used to gauge said inflation. 2nd PROBLEM!

OK the fiat money system can be massaged to work (ie either we have continual cycles of moderate booms and busts, or we have extremely low but stable growth, something close to 1-2% a year). There really isnt a workable alternative money system out there but some major modifications to who can print money needs to be made. Namely anyone other than a Central Bank really should not be able to magic up money from thin air.

Inflation reporting has been ridiculously politicized for decades, and fudged to fit the plans of the incumbents in office. It stands to reason that if you have stable growth at x%, there is really no way in hell that inflation does not match or very closely follow the curve.

The problem has singularly been the exponential creation of debt over the last 20 odd years (by debt i mean banks creating loans).

We have had rampant house price inflation, food price inflation and energy price inflation all at the same time and here in the UK, all those things underpin our economy, when these things get out of hand, all hell breaks loose.

Do people honestly believe we have created anywhere near the amount of real physical wealth (digging it up, growing it or making it) to match the absurd amount of funny money (read debt) in curculation around the world?

And don't get me started on global population growth, its getting out of hand! Soon we will not have the means to feed everyone in the developed world, let alone africa!

The ascent up the curve was one hell of a joy ride, the come down is gonna be oh so painful!

[Solidec]

One more thing

P F I

Biggest con by any government ever, and Cash Gordon McSnotty is the architect of this most deceitful of off balance sheet ENRON style frauds.

The conservatives created PFI to deal with real infrastructure investment a long time ago. El Gordo (apparently spanish for "The Fat One"!)took it and used it as a way to spend bollock loads of cash and hide it from the balance sheets, and therefore the budget deficit, thereby meeting is precious Golden Rules!

God damn this twat has financialy ruined the UK, and whats worse, I fecking voted for the cnuts back in 2001! (was out of the country in '05, but by then was leaning towards Lib Dems)

[Purple Dalek]

If you voted for them then you are equally guilty.

Politicians only ever do what they think will get them into or keep them in power. The basic truth is that the people who voted for them are the people who got us into this mess.

That people who didn't vote for them are going to suffer is quite horrendous, and I don't see why they should. It just isn't fair that hard-working families should suffer because of the greed and stupidity of others.

Hmm, and the people who didn't vote: well, they're worse than the people who did vote for them.

[BrilloPad]

If you voted for them then you are equally guilty.

Politicians only ever do what they think will get them into or keep them in power. The basic truth is that the people who voted for them are the people who got us into this mess.

That people who didn't vote for them are going to suffer is quite horrendous, and I don't see why they should. It just isn't fair that hard-working families should suffer because of the greed and stupidity of others.

Hmm, and the people who didn't vote: well, they're worse than the people who did vote for them.

So how should we vote at the next election then?

[Doggy Styles]

So how should we vote at the next election then?

ABL... anyone but labour.

I'd consider the Monster Raving Loonies but their policy for a giant p1ss-up might not be as great for the economy as it sounds.