There will always be prophets of doom, I guess, forecasting the end of the world. The care-taker at the school where I work insists that the Koran tells of a war-to-end-all -wars in the Middle East, followed by the final Day of Judgment. Who knows? Turkey and the United States look to be on a collision course right now. Who’ll blink first, I wonder? Or will they actually come to blows?
But getting back to the economy, that is no doubt the biggest danger. Wars are generally a side effect of the uber-rich seeking new ways of grasping more of the world’s wealth to themselves and ensuring that the rest of us are kept in our place.
Last Monday the US Dow Jones Industrial Average dropped more than 1,500 points, and I read that the fortunes of the world’s 500 richest people, including Warren Buffett, Mark Zuckerberg and Jeff Bezos, fell by $114 billion.
“Berkshire Hathaway Inc. chairman Warren Buffett, the world’s third-richest person, was hardest hit, losing $5.1 billion, according to the Bloomberg Billionaires Index.
“Facebook Inc. Chief executive officer Mark Zuckerberg’s fortune tumbled by $3.6 billion, the second-biggest decline.
“Even Amazon.com Inc. chief executive officer Jeff Bezos, the world’s richest person, wasn’t immune to the carnage. His fortune slipped $3.3 billion to $116.4 billion. Alphabet Inc.’s Larry Page and Sergey Brin each took hits of about $2.3 billion.”
Time Magazine reported that nineteen people in the world managed to lose $1 billion or more each. See the list here.
Since, then, things seem to have settled down, and economist lackeys of the capitalist world are reassuring us that “what happened to the markets amounts to a correction rather than a crash.”
On the other hand, an aristocratic-sounding fellow writing in the UK’s Daily Telegraph, Ambrose Evans-Pritchard, says “The Fed and fellow central banks have stimulated a titanic expansion of debt over the last quarter century: an asymmetric policy of letting booms run their course while always intervening to prevent busts, culminating in the final throw of QE.
This has driven down the natural Wicksellian rate of interest and led to grievous intertemporal distortions. It has lifted the world debt ratio by 51 per cent of GDP to 327 per cent since the pre-Lehman peak, and led to a synchronised “everything bubble”, from bonds, equities, property, to art and Bitcoin.”
I confess I got lost with some of the jargon. The “natural Wicksellian rate of interest” and “intertemporal distortions” sound like things Douglas Adams might have invented, but Mr E-P does sound a little worried, doesn’t he! In fact, he began his analysis with the words, “Say your prayers”.
Well, I guess if you have $120 billion to start with, losing a paltry $3 billion is not going to worry you unduly. I’m wondering, however, if there weren’t a few people in the USA, outside the billionaire bracket, who took losses they couldn’t afford. I haven’t read anything about them, however, so I’m purely speculating.
But the real issue that concerns me here is not the small change of a few filthy rich planet-rapers, nor even ma and pa investor in homeland USA.
The question I want an answer to is: Where did that money go? It’s not as though young Mr Bezos left his wallet on the bus with $3.3 billion in it, and some lucky guy found it; or Warren B had an envelope stuffed with $5.1 billion in his back pocket, and someone snatched it. That I can understand. I lose money, you find it, lucky you.
But this money, as far as I understand, actually disappeared into thin air. No one is any better off as a result. How can this be? What does that say about what money actually is if it can just vanish without trace? And that, of course, begs the question, where did it come from in the first place?
Until we all start to focus on demanding answers to these questions, or maybe seeing the answer that is under our nose, instead of allowing ourselves to be distracted by red herring minority interest social issues, our world is surely on the road to Armageddon – and those uber-wealthy zillionaires and their lapdog economist experts are running out of Band-Aid solutions.