Global Depression Or Slow Stagnation? – OpEd
By VOR
By Polina Chernitsa
The second day of the G-20 summit in Mexico saw the presentation of a special report on the possible scenarios of development of the world economy in the next ten years.
According to the document, the 2008 world economic crisis fallout may lead to either slow stagnation or global depression by 2018.
The report’s bottom line is that the 2008 crisis is yet to be resolved, something that the authors say may be worked out before the end of 2021. According to them, the next ten years should see the international community work hard to set the tone for creating preconditions for further economic growth. The report says that developing countries should come to the fore and become those locomotives which could help the world economy ride out of the crisis. The focus should be on the re-orientation of the national economies toward inner consumption, the report says, urging the US and the EU to show a political will and pursue a consolidated budgetary policy. The probability of this scenario is about 90 percent, experts say. They are echoed by Moscow-based financial expert Roman Andreyev who argues that this scenario will be viable if the current political approaches to it are scrapped.
Another scenario stipulates an economic slump and a possible domino effect which could lead to a host of major social and political upheavals and even wars. The probability of this scenario is just 15 percent, Moscow-based economics expert Dmitry Khlestanov says, warning of the growing inflation rate that all the countries will soon have to deal with.
Meanwhile, the last developments in the eurozone prove that the worst-case scenario may well see the light of day. Experts particularly point to the continuing crisis in Greece, the disintegration of the anti-crisis French-German tandem and the policy pursued by the French Socialists who are up in arms against austerity measures. Developed countries, for their part, have yet to decide on a comprehensive reform of the International Monetary Fund and other major institutions, something that may help developing countries to expand their global economic clout. With the economic upswing unlikely in the near future, time is already ticking for the decision-making process, experts conclude.
Unless the world’s leaders come to their senses and understand real monetary economics, (not the nonsense espoused by many universities), then this is how it will be. But it doesn’t have to be like this — it’s like this because we’ve all, in every country, been so collectively ignorant and/or stupid as to allow the private creation and issuance of money as interest-bearing debt, by commercial banks. Most people have no idea that every time a commercial bank makes a loan it creates new money as interest-bearing debt, at the instant that the teller is tapping on the keyboard to put the numbers into the borrowers bank account. And we wonder why we have inflation!
For every nation, all money should be created and issued debt-free and interest-free by the nation’s government-owned central bank. All commercial banks should be acting only as financial intermediaries, on-lending their depositors’ existing money at a profitable margin.
Then all we need is for people’s capitalism to replace crony capitalism and we’d have continuous growth. Just read the new book “Where Does Money Come From?”, available using PayPal from http://www.positivemoney.org.uk