Nouriel Roubini, an economics professor at New York University, first predicted a US recession in July 2006 (which was a very controversial position at the time, but not today).
Now, Roubini said that there's a greater risk to the economy, the mother of all meltdowns:
Now he states that there is “a rising probability of a ‘catastrophic’ financial and economic outcome”**. The characteristics of this scenario are, he argues: “A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.”
The first step in this path is already happening:
Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000bn and $6,000bn in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.
Eleven more steps toward a giant economic catastrope, as outlined by Financial Times' columnist Martin Wolf: http://www.ft.com/cms/s/0/4d19518c-df0d-11dc-91d4-0000779fd2ac.html (Photo: Roubini's website) | Roubini's blog at RGE Monitor - via Linkfilter
I like using the parity or should I say similarity of comparing the cyclical nature of mass extinction rates throughout geological time, to that of economic cycles (i.e. deflation spirals) of recessions and depressions thoughout the history of monetary economy within societies. Ecology is economy, one can not exist without the other; they are so interconnected. They are all cyclical systems interconnected within paradoxical proportions. From a ecological perspective, we are currently in one of the worse recorded mass extinction rates, ofcourse the economy is going to eventually mimic other systemic cyclical patterns.
My point is that every known civilization has eventually come to a end (cyclical), and what is the very core functioning property of our current civilization, "our economy?". Unfortunately our current economy takes unnatural precedence over everything else. Combine this with global warming, increasing populations, internalize conflicts (war), problems with logistics of goods (world hunger/poverty); collapse seems to be a strong plausible reality. The fact is, we live in a finite world, with finite resources, but yet our economy is based under the contingent of constant sustainable growth; which is not currently possible.
So I have agree, collapse is inevitable. Unfortunately, economic collapse isn't my biggest concern right now... However, some people argue that we as a civilization have reached a pinnacle moment in economic history. Just like when the barter and trade system evolved into a monetary/currency based system because the barter and trade system was not sustainable or collapsing at the time. If everything is cyclical as I claim, then from an optimistic perspective, we are currently experiencing the collapse of our current system, and it will naturally evolve into a more robust and sustainable system, maybe even one based on no currency.. Who knows, what the future holds is all I am saying. I currently do not have much faith in the current economy, and I imagine many others do not either.
Everything is Fallin' Apart
Dr BLT
words and music by Dr BLT copyright 2008
http://www.drblt.net/music/EveryThingIsDemo2.mp3
This is from the album, Lipstick: Soundtrack for the Presidential Election 2008. Check out:
http://www.drblt.net for details.
In the 1930s, it took the New Deal and heavy government intervention to fix the problem. WWII may have helped, but I doubt that war is a necessity for rebuilding an economy; in fact, it usually has the opposite effect.
Here we are, embroiled in a drawn-out war that has contributed to our economic downfall. It's hard to say what can be done to help us. But I think a good start would be if the government stepped in and put caps on certain poverty-causing expenses, and even rolled them back. Rent --- both business and residential --- is far too high, and landlords do not need that much money to survive. Subsidies for alternative energy sources, such as were granted by the Carter administration, would lower the cost of producing electricity from renewable resources and wean us off of some fossil fuels. There are many more equitable ways to restore the middle class and reduce poverty.
The problem CAN be solved. But it will take a lot of work and leaders who actually recognize that there IS a serious problem, and has been for some time.