The G-20 has agreed on plans to fight the global downturn. But its approach will only lay the foundation for the next, bigger crisis. Instead of "stability, growth, jobs," the summit's real slogan should have been "debt, unemployment, inflation."
London had been bracing itself for riots during the G-20 summit, with bankers being warned to leave their suits and ties at home. But, with a few exceptions, the demonstrations on "Financial Fools' Day" were light-hearted rather than violent.
When this hinge-point in human history is remembered, there will be far more sympathy for the people who took to the streets and rioted than for the people who stayed silently in their homes. Two global crises have collided, and we have a chance here, now, to solve them both with one mighty heave - but our leaders are letting this opportunity for greatness leach away. The protesters here in London were trying to sound an alarm now, at five minutes to ecological midnight.
Since 2006, figures for the money supply -- in other words, the total number of dollars in circulation -- have no longer been published in the US. As a result, a statistic which is regarded by the European Central Bank as a key indicator is now treated as a state secret in the US.
This illustrates the fundamental economic misunderstanding under the whole edifice. This money being pumped out in the trillions is not circulating. It is static, tied up in secured loans which are qualitatively different to the credit or "time to pay" which mobilises goods and services.
The new money = credit now being poured in to replace toxic debt with quasi-cash will be static as well, because there are not enough creditworthy individuals or projects left for whom the banks will mobilise it. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
This person deserves a big thank you note from all of us and some publicity.
gabor_steingart@yahoo.com
"Debt, unemployment, __flation" could fill several tribunes in each country. Our knowledge has surpassed our wisdom. -Charu Saxena.
