In the last year we hear about financial problems and bubbles all over the world, USA, Europe, Japan. Most of the countries are in great debt and are struggling to serve it. Is this the end of capitalism as we know it? Will we see another type of economy in the next years, or a total collapse? If I knew I wouldn’t be writing this article and for sure, I wouldn’t share this info with anyone else, but nevertheless there are some facts which we must see and mark them bold.
On the one hand we have west, Europe and USA. They both consume most of the produced goods and as a result they are the biggest regulators of the global economy. Going into depression for those two, has as a result and will have even more in the near future, a much less consumption of goods. I believe this is obvious, more debt, means more taxes for the tax payers and as a results less buying power for the average consumer. Less consumption leads to less production from the companies, meaning fewer work forces and as a result more unemployment. More unemployment leads to less average buying power for every country and so on; it is a no ending cycle.
Now, how will this affect the whole world? I can’t be precise of course, but we can be certain that economies like China and India which are mostly based on exports will suffer. Less consumption from the west means fewer jobs for the east. It is like having a living organism, an infection on one organ can spread (under conditions) to others. The interactions are infinite but still we can have a preview of the global picture.
And you may ask me, how can this spiral stop? I don’t know right now and I don’t think I will have an answer any time soon. Masterminds from all over the world are straggling to balance things and yet, no answer is found. The global economy walks on a tight string and so far, all wrong decisions are made from politicians, forcing her to lose balance.
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