A Choice Between Eating or Having a Roof Over Your Head
If you're a middle class South African, countries like the US, Canada, Australia, UK and some parts of Western Europe are held up as the shining cosmopolitan life we should be aspiring towards.
I mean we're part of the "shit hole" countries Donald Trump refers to and we'll we're not without our problems.
Having been plundered for resources, having to deal with systematic racial segregation and it's lasting after-effects many South Africans felt that a better life would be one in another country.
By all means more power to you, in many cases for these people it was the right choice. They seemed more advanced, the safety measures were better, the standard of living higher, the promise of high paying jobs and more is very attractive.
But thats what Western Economies have lead us to believe, that they had all the answers and a debt-funded society was the way to push the world forward. In many ways it was, but greed has pushed these financial institutions and instruments further an further way from being constructive monetary policy.
Do I think SA's economic system is great? Absolutely not, it's a Western system that's already faultily layered with our own incompetence, greed and cronyism which makes it even worse, sadly. But since we're pretty much used to living in hardship it's really no biggy, on we march.
Image source: - abc.net.au
Things are starting to come apart at the seems
I've spoken about developed markets running out of suckers to milk and the market is going to collapse, that is a given. Those suckers were the next generation of people and we bank on their being more people more jobs and everything going up to keep this circus going.
We then see these developed nations attract educated and highly skilled immigrants to try and attract more suckers to prop up their broken systems. Which is why we see these anti-immigration calls from first world countries but people don't understand, if you kick these people out, your economy will collapse even faster.
One of the signs has to be telling people to choose between eating and keeping their home.
I read this article about Australian banks referring mortgage owners to Foodbanks and that really struck a chord with me.
What kind of so-called freedom we have in the modern world where people have to choose between having a roof over their head or covering their living expenses? While sure people can scale back and live a more modest life, how far will this go? How long before scaling back doesn't stop the problem?
Money was not lent for productivity
Banks got greedy and instead of offering capital to businesses who would slowly pay it back once they became profitable and created value in the market. Most loans went into property, property in large cities has skyrocketed in this boom and bust cycles as new suckers come in for the promise of always finding wealth.
To keep the demand for property going requirements were changed, deposit sums got smaller, repayment lengths got longer, interest rates got lower, and leverage got higher.
In the 80s you could borrow between 2-3 times your salary and now in places like London you're able to borrow up to 12 times your salary for property, its insane.
Bonds aren't used as sound financial instruments, its become a gamble and about pushing out the volume and making sure consumers are tied down to debt.
Greed and central planning have leveraged human capital to its limits and we're seeing more people reach a breaking point. Unemployment will rise, homelessness will rise, mental health will be at an all-time low and the developed world will need to seriously reconsider how they do business.
The last crisis clearly wasn't enough for us to change our ways, will the next one be the one that wakes us up from our economic slumber?
If you liked this post sprinkle it with an upvote or resteem and if you don't already, consider following me @chekohler
|Buy & sell STEEM||Donate LikeCoin For Free||Earn Interest On Crypto|