It is a little difficult to know where to start as so much is happening and the year has only just begun. The global system can be viewed as having four different elements: Economic, Political, Military and Religious. They are all linked together but all have unique facets in how they impact the world in which we live.
While not unexpected, the speed with which the global economy has hit the brakes in the first days of the year has been surprising. China, which is trying to re-engineer its economy so as not to rely on exports for growth to one of internal consumption, has hit severe turbulence, the last days seeing huge drops in its stock markets. In China, many shares are bought by private individual investors and have been wiped out by the losses which began last year and accelerated to such a point that trading had to be suspended twice already this year. These are the people the Chinese authorities need if internal consumption is to be the new economic model, instead they are all feeling much poorer and hesitant about making new investments and spending. To be fair the problem is not only China’s, globally, the worlds economy has never recovered since the financial crash of 2007. The only thing that has propped up the economic system since then has been the vast amount of almost free money that central banks pumped into the system. While company stock valuations soared over the years since the crisis the fundamentals have not changed. Companies have not been making the profits to justify their stock market valuations, instead of improving profits through growth they were cutting costs. While improving the bottom line it was covering up the fact that businesses have not been growing. Now the time of essentially free money is coming to an end the fundamentals are coming back into view and is the reason why global stock markets are having such a turbulent time. The emperor has no clothes and the central banks and governments have very few options left open to them. With global share prices still having a way to go before they reflect the actual values of global businesses it is going to have a knock on effect. Pension funds and property are going to be the big losers. People are going to start feeling poorer. When people feel poorer they spend less and this impacts business growth. The system is so broken that there is no way out of this feedback loop unless something fundamental about the system is changed. Do the central banks and governments have a solution, I think not.
Something that should amaze people is that in all the time of human history we have tried all forms of government, apart from global government, and not one of them has been successful, in the long term, of bringing about peace and security, helping all its citizens to have a dignified life. Instead they have abdicated more and more responsibility to the banks, trusting them to create the conditions for economic stability and therefore political stability. I often wonder what use our governments serve. All around we see crumbling infrastructure, cuts to health-care, the education system being run into the ground, increase in social instability as well as far fewer opportunities for social improvement. In the past there were far more opportunities for people to improve their lives, these opportunities are rapidly disappearing. If governments can’t deal with these fundamentals then what is the point of their existence? This is without going into global politics, all of the major powers in competition with each other, wanting to be top dog, but this situation leads to proxy wars, global instability, power vacuums and international terrorism. As the global economy shrinks the pressure is on for these countries to work even harder to protect their interests, creating yet another feedback loop. We will see an increase in nationalism and growing popularity of more extreme political parties as they promise only they can protect the interests of the population. In reality all that happens is increased polarization of populations, minority groups being blamed for the ills of the country. We are seeing this happening in many countries around the world and it will only spread as global conditions deteriorate. It will also increase the risk of conflict as relationships between neighbouring countries break down.
The only area of real growth now is in military spending, as we all know instability is good for the military sector. War is good for business. Morals have nothing to do with it, all is for sale, often to reprehensible regimes. The conflicts these weapons are used to pursue create displaced people, refugees and untold suffering. As the global economy teeters, the risk of conflict grows as competition between nations for a greater slice of the shrinking economic pie increases. Add to this the growth of ideological and religious differences between certain countries and the count-down to increased and new conflicts grows rapidly. Countries who have major weapons industries will rely on this sector for a larger part of their economic stability while trying at the same time to keep the consequences of these conflicts where the weapons are used as far as possible away from home.
I’m grouping all the main religions together here because they are all equally corrupt and are all equally responsible for the deaths of millions through the ages. Today, religion is used as an excuse to kill, to dominate and to keep the masses quiet in the face of increased hardship, all often in collaboration with various governments. The tension between Saudi Arabia and Iran is based on religion. Jews and Palestinians is religious conflict. The Russian Orthodox church telling ordinary Russians they should prepare for greater hardship while it is the greatest benefactor of grants from the Russian government. There is a link to this because it left me speechless russian-patriarch-kirill-does-not-see-tragedy-in-the-economic-crisis In India there is increasing Sikh extremism with the permission of the government. The Vatican, possibly the richest organization in the world sees itself as some sort of supranational government but instead of using its wealth and influence to help people is more concerned with getting richer, milking its followers and only offers prayers when people need real practical help. It consorts with political leaders around the world like a courtesan believing she is a queen who sits above her people. How long will it be until politicians around the world get tired of all religious meddling and trouble making. Particularly as the global economy gets worse and they see just how rich these religions have become. I am curious to see what will happen when the governments are broke and they then look at the religions and all their wealth and see the religious system acting as if it is untouchable.
This is the year when finally it will be understood the global system, in all its parts, is beyond repair. Maybe it is time people started thinking about the New System.