Some Mild Economic Hassle Ahead

Third world market / mercado tercermundista
Sign of the Times - Image by Andreuchis via Flickr

Some may say I’ve been ignoring the global economic crisis, but the way I see it, if you’re at a funeral you don’t say “Jesus, it’s a dead guy in a freaking box!”

Let’s try to be positive. There has been a little good news in the last week. Some sort of half-assed budget deal was cut in the US, saving its economy from plunging to Third World status. Yet. The Euro still exists, even if it seems about as stable now as an upended pyramid. Full of nitroglycerine. On fire.

But otherwise, the outlook is not so good. The Americans cannot borrow and spend to get out of recession because the balance of power is held by political morons. In the eurozone, we apply band-aid after band-aid to a haemorrhage. Sooner or later we will need to face up to the facts: We either have one single economy with one single fiscal policy, or we can’t have a single currency. That’s not a decision we know how to even begin contemplating taking, and the longer we put it off, the more countries are going to be flung like screaming toddlers from the runaway merry-go-round.

And in a sure sign of economic brick-crapping terror, the gold price is skyrocketing again. Two weeks ago I pointed out that the world’s gold stocks were now worth eight trillion dollars. It’s estimated that in three months they’ll be worth over a trillion more. Funny how market chaos seems to be good for people who happen to own a lot of gold. But that’s probably just one of those coincidences.

We shouldn’t panic or despair yet though. There’s still China. China, that engine of the global economy, driving back collapse. Even when all of us in the West are too broke to buy each other’s stuff, we can always afford theirs. Guess what’s happening in China? Their buoyant, vibrant, export-fuelled high growth economy has led to – no go on, guess – has led to… Have you got it? Yep, that’s right. A housing bubble. China has a housing bubble.

But don’t worry, it’s bound to find a soft landing. Don’t they all? Ha ha ha. Oh God we’re so doomed.

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