All the world’s economies are in the midst of a major crash. This has happened before, it is happening now and if we persist with this system the global economy will crash again.
On Sept 17 2019 the interest rate in the repo market jumped from close to two per cent to around ten per cent. The banks stopped lending to derivative and hedge funds. The Fed had to step in and pump money into the market to keep the repo wheels turning so large investment houses would not go insolvent.
The step by the Fed was to run until early Oct. 2019, then got pushed to Dec. 2019, then pushed again to early 2020. Now there is no end date. Since Sept 2019 the Fed has pumped in more than 800 billion U.S. to the repo market. The balance sheet for the Fed has ballooned to a debt holding of almost 4 trillion U.S. and increasing. While liquidity problems in the repo market are the explosives set to implode the global economy, Covid 19 is pulling the trigger.
The market is crashing, we can watch it in real time. Watch the reserve banks panic as they try to stave off financial ruin of the banking sector. We can listen to the talking heads tell us all about how important the pecuniary economy is. Listen to politicians tell us everything is fine, that they are “taking steps”. We can watch trillions of dollars pumping into the banking system and markets. Trillions of dollars, and we can watch the markets continue to crumble.
We can panic also, worry about our own debt, our homes, our jobs, cars, food, toilet paper. Worry about our futures; what will we do if the economy collapses again? Or instead we question the basis of our economy. We step back, take a deep breath and ask, is it worth saving?
Could we let it go and create something new, something completely different?
Can we try a model which does not drive us into competition with each other as we try to “get ahead”? How about a system which isn’t predisposed to causing harm through its operation? A process which will not make us sick with stress, or leave people destitute and living on the street. A structure which won’t impoverish more than half the world so that a handful can live a life of opulence. A method which will not cause increasing harm to the environment we rely upon, mutilating our shared home.
Can we imagine, design and install a system that will usher in an age of real social prosperity?
Of course we can, – we can create systems, we can follow systems and we can change systems. It will start with a robust conversation about what matters, what indeed matters. From there we can come up with ideas, we can discuss options and we can begin to design something new. It all begins with our commitment to communication.
It is when we are open to engaging in dialogue that we can address systemic problems and investigate options for resolution. When we shut down treating subject matter as taboo, as an unalterable natural order, we suffer the poor outcomes generated. Nothing is more important than open, honest discourse about the consequences of the economic environment in which we find ourselves, especially while it is creating less than optimal results for individuals, society in general and the wider biosphere.
Climate change, the loss of biodiversity, pollution, widespread malnutrition, the emergence of new viruses and potential social collapse. Could there be more compelling reasons to investigate the connection between our economy and behavioural dispositions?
It is up to us, to tackle this subject matter, treating it as the priority theme it deserves to be and seek alternative methods and resolution. Or, continue as we are, suffering through all the declines. Declivity spawned from an antiquated social model benefiting the few at the expense of the many. It’s time to start talking so we can make this the final crash of the economy.