Haven't blogged much about the collapse of the Euro zone economies or indeed much about world economies for some time but a few headlines caught my eye today.
US unemployment rate rose again is June by 0.2% to 9.2% which equates to roughly an additional 300,000 people out of work bringing to total to 14.1 million people. The graph above says it all really, but that is still a lot of people who are suffering at the hands of the bizarre and unsustainable world economy - this time in the former economic powerhouse and not drought torn Africa.
The Torygraph is talking about the impact of debt on the Eurozone, the UK and US, predicting that their currencies will collapse soon: "At some point soon, and it brings me no pleasure to write this, private sector Western investors, together with our emerging market creditors, will drastically cut their exposure to Western sovereign debt. This will come as a rude awakening to the US and the big European sovereigns, who for years now have abused their "risk-free" status."
Inflation in the UK is holding at 4.5% for now but is expected to rise spelling misery for mortgage holders and those who continue to run up personal debt. I had a house in 1990 with a mortgage that nearly crippled me (at a rate of 16.5% I seem to remember). I lost thousands as the value of the house plummeted and it took years for my finances to recover. The impact on the economy of the loss of half a million public sector jobs has not yet been felt and it will be a shock.
What is in it for the big oil producing countries and for China to keep selling their commodities to the West, aside from ensuring that the debts continue to grow? Isn't that how the West treats developing countries? At what point will the unbalanced and unsustainable economy collapse?
The solutions are out there but they are radical and upset the ruling elite. Localising economies, taxing the rich more than the poor, not relying on economic growth, ensuring production is meaningful, useful and longlasting, and breaking the debt cycle which economies have come to depend on, would all be a good start. Without a radical shift in government these are a long way off.