Of late I have pondered the strange world of banks, and the world economy in general. You see, I simply do not ‘get’ a CEO of a major bank saying they must hike up their interest rates to maintain their Standards & Poor rating and then, a mere week later firing close to 1,000 staff. This, in light of their $6.5 billion dollar profit which rose by 5% in the past year. To me it smacks of greed, pure greed.
Oh yes, I know that they need to borrow money internationally to lend it to business and households. And I also know that the cost of that money to the bank has gone up. But with the huge profits they make, and the continuing increase in profit over the past years including during the global crises, makes me wonder about their motives.
Further to that, I wonder how long we can survive with a financial system that demands continuous growth. Nothing on this Earth can continue to grow forever. Considering that quite a few of what were termed 3rd world and now ’emerging’ economies are scooting ahead, at what stage do we hit a snag and no more growth is possible? I mean, at some stage we are going to have a population because that we cannot feed , there isn’t enough land for or under cultivation for food at present as it is. In fact, I understand that quite an alarming proportion of grain production is going to ethanol crops for fuel.
Something has got to give and unfortunately, my little worry meter that lives in my gut is beginning to send warnings. Several countries in Europe are in depression although they don’t call it that. For example Greece, Spain and even Italy. The United Kingdom isn’t the best place to be right now because of high prices and growing unemployment. There is civil unrest in the Arab world and in some South East Asia countries (Thailand and Burma for example). The USA is still trying to get itself out of trouble.
Luckily, here in Australia we have missed the big bullet for the time being. But with our dollar high I wonder for how long. It will eventually lead to more manufacturing becoming unprofitable (note car manufacturers are being held up by government) and more job losses.
So, start growing your own vegetables, learn how to preserve them. We have had rain but I’m sure drought is not far off so we need to find better ways to conserve water and energy for our homes. And of course there is climate change as well.
So there is my pessimistic view of the economic outlook. I’m no economist but I’ve lived long enough to see cycles and worry. On the bright side, we are still living in a nice country that is holding it’s own. We are still the ‘lucky’ country. Let’s hope it stays that way and the greedy banks will have their customers turning away from them in droves (I know, not likely but…). Fingers crossed.