Originally Posted by Hugh
Why not nationalise them?
*btw, you do realise the headline figure is for the re-financing of corporate debt in US, Asia, and Europe, and there isn't a problem in the US and Asia due to the maturity of the Corporate Bond market, so the headline is, at best, misleading, and at worst, trying to be inflammatory....
*btw2, Corporate Debt re-financing is not in "a crisis", there is the possibility of a "crisis" in Europe - possible is not the same as probable.
agree article poor.
Thanks hugh sorry should just put euro debt less think report it was $13-$16tn.
Quite alot money to re-finance when banks in mess eurozone it might be worry. I should meant say banks might struggle to cover this if eurozone gets worse.
Can we afford to nationalise them thats the other issue hugh.
You do wonder how much our issues been down to Crony capitlism in europe.
---------- Post added at 15:59 ---------- Previous post was at 14:59 ----------
Originally Posted by Rob
At the simplest of levels, the world's economy is founded on a concept of growth. As time goes buy somehow you can make more and sell more. Trouble is at a very simplistic level that is the flawed concept of pyramid selling, and assumes that there will always be more an more customers.
The financial system has similarly, somehow, managed to increasingly create money, in it's own pyramid schemes. Indeed the whole idea of quantitative easing which many national banks are now using is simply "printing" extra money which can be loaned, but where did that extra asset securing that loan come from?
Everything works, whilst everyone trusts each other. But the moment someone has a difficulty the cascade effect of that little ripple can soon topple a whole pile of dominoes. We saw this at the start of the credit crisis with sub prime lending bringing down many banks. We see concerns of Greek's national debt bringing down other national systems. So corporates should be looking over their shoulders as their securities often seem to be little more than electrons in a computer spreadsheet.
very good points.
I been reading article which critised legarde thinking on greece to assume all was tax evading dodging. Infact the poor/lowpaid many did pay taxes. It was crony capitalism and some middle classes, super rich who believed that tax is not for them to pay or pay little.
We have this culture here too that one domino effect we have had.why the culture grown but its massive cog which killing worlds economy.
The other is wages people need that disposable capital to spend to drive economy to consume goods/services.
Again many believe its not there responsibilty/worse cant afford too to provide healthy wage to consume and palm it on to governments to top up living wage.
again mechinisms which failing. Governments took there eye of protecting economy by controlling standard living to managable levels.
I do fear quantitive easing might harm long term the economy. Fiat system is now showing signs its cracking as like you said trust broken.
We lost competitive markets due to big corporates buying competititors up while governments played tiddlywinks put head in the sand for years and years.
That competitiveness we had kept prices in check. instead we get massive corparates corner markets dictate the price to pay. Worse cartels of greed become widespread. Cap that on land and property you have freight train out control seemingly due crony capitalism nobody was in the cabin to pull thre breaks put economy back on track.
Problem is this badly drives standard living up to breaking point. Wages then cant sustain living we hit one almighty impasse. You see corporates litarally into everything now instead concentrate on the field expertise. You see petrachemical industries in to food industries etc. Unilever prime example own colmans mustard but into washpowder.
Its not healthy to see this being allowed but nothing stopped it.
They regard paying taxes laxed at best. Yet they want consumers there only I few ways to create those consumers.
1 Better wages plus more jobs which creates that disposable income. This has come from business we shown public sector cant provide it.
2. they wont then they got pay enough tax to provide public sector to either top up wages private sector or volumes workers.
3. drive the standard living down by nationalisng utilities, capping reducing land, property values. Capping rental charges. Controling oil prices. All which going to be dificulte to do.
4 find new emerging market to want to consume there goods. However you still need western economies to support the push for emerging markets. Fine but often they not got disposable cash to consume. Hence the infrastructure underliny weak.
Corporates tend to want all the cakes and eat it.
At somepoint they will wake up realise sensible capitalism is required. They got start thinking what they want.
No tax then creat jobs and wages to sustain economy. Wont pay jobs or wages then pay taxes for governments to fill the holes.