The G20, faced with a global slump in stock prices, has pledged to keep things afloat. This, I think, makes at least a half dozen Ruling Class efforts I’ve seen over the past month to stave off disaster…each assertion (by a central bank, by China, by the European Union, etc) is that no one should worry…they’re on it and they’ll never let it all fall apart. Usually, when such announcements are made, stock prices shoot up. I guess because people who buy stocks are stupid enough to actually believe such stories. Naturally, there is a renewed slump…and the slumps come faster after each “we’ve got a cure!” announcement.
Sure enough, European stocks inched off their lows…but a Mish points out, Asian stocks weren’t even phased by the announcement: they resumed their slide from the day before. Essentially, the Masters of the Universe are running out of even fake things they can do stave off collapse. I don’t know what they’ll do next, but I guess the maximum half-life of this latest pledge from the G20 is about 5 days. It might see us through the weekend.
But they can’t prevent the crash – they can only delay it, and the longer they delay it, the worse it will be. The economy is bad – not just the US economy, but the global economy. It is honeycombed with bad debt, corruption and political blindness. Some nations have managed to fake it to prosperity the last three years (most notably China), a few nations actually did well (Australia and Canada, who sell a lot of things to China), but all nations are doomed to an economic downturn. No part of the world will escape it, and it will be a hard landing. I just don’t know when it will happen…depends on how badly the Ruling Class wants to cling on to power. A bad economy going in to 2012 means not only Obama loses, but may well mean an historic electoral blowout of the Democrats. The people in charge don’t want that…same thing around the world. The Chinese don’t want revolution, the Eurocrats want the people to keep quiet, etc, etc, etc. So, these clowns will go to very great lengths to patch up the sinking ship.
And that means – what? Beats me…could be they hold it together until 2013…could be that the market crashes tomorrow or Monday. We’ll have to wait and see…
UPDATE: Want a little more proof that the global economy is lousy? According to this news report – about a new supertanker being mothballed – back in 2007 you had to pay $229,000.00 a day to lease a tanker…this supertanker is being mothballed because they could only get $1,000.000 a day. This is where economic rubber hits to road…not in phonied-up government statistics, not in stock prices and bond yields (though these things can be important) but in whether or not people are actually doing things. Ships lying idle is an indicator of an economy in desperate straights.