..."Over US$ 100 Trillion Additional Credit Needed to Support Global Growth"
[Mike's Note: I do have a Jesus-follower's angle to this if you hang in there with me...
That's the headline of a post this morning on forumblog.com, the blog of the World Economic Forum. (The WEC's Annual Meeting, which I have described elsewhere as "the showcase of self-congratulatory global plutocrats and corporate elites", will be taking place in Davos January 26 - 30.)
The teaser immediately below the headline says this:
The World Economic Forum's report on examining sustainable credit find that credit levels need to double over the next 10 years, growing by US$ 103 trillion, to support consensus-projected economic growth.
Let's consider for a moment the idea of a projection, as in "consensus-projected economic growth" cited above.
It used to be that a projection was an estimate of something that was going to happen. A forecast, if you will. We believe that this event or condition is going to occur anyway, so let's see if we can quantify it. By its very definition then, nothing is required to make this condition occur; it's going to happen on its own. It follows then, that if anything is 'needed' (see the headline above) then this is not a projection, but a desired state that will not occur unless there is some form of intervention.
Do you see my point?
We're now confusing desires with inevitabilities. It stands to reason though; We live in a world that is addicted to growth. Anything less than consistent, positive growth is viewed as abject failure. We've forgotten, apparently, that infinite growth is an impossibility. Those are long-term sentiments, and in today's enlightened times we've reduced the meaning of 'long-term' to the end of the current quarter. In my previous life in the investment industry we had a saying: "Trees don't grow to the sky." We were as Gordon Gekko-fied as anyone back then, and even we didn't believe growth could go to infinity. Apparently we were being naive.
Back to the quote: We've drawn a fiscal line in the sand at the 'consensus-projected economic growth' level, and we now must meet that target, or suffer the wrath of, well, whoever or whatever it is that is wrathful when we fail to hit economic targets. The good news is we can hit these growth targets--if we double the credit limit on the planet's credit card.
Think about that. In order to convince ourselves that we are doing well on a global scale, we need to double the amount of debt out there. Does that sound alarming to anyone?
Never fear though. The same plutocrats who have determined that this 'projection' is reasonable attainable desirable required assure us that it can be hit "without increasing the risk of major crisis". I feel much better now, because lord knows these folks have done a grade A job of managing the economy up until this point. Come to think of it, these are the same people who have warned us that "The world is in no position to face major, new shocks." Hmmmm.
It's not all roses and butterflies however. Admittedly, "[t]he report finds that meeting credit demand will be challenging" for several reasons. Challenging, but not risky. Apparently "banks will require additional capital." Hey, the last time they need to find 'additional capital' they did fine.
Cough *bailout* Cough
Seriously, the banks have no chance of raising this capital "unless there is a marked increase in US domestic savings rates." Have you seen the US savings rate trend? Not reassuring.
I'll end the economic rant here by adding that if you're not very, very afraid of all this you're not paying attention.
Here's the Jesus-follower's angle:
It should be obvious by now that the world is no longer governed--at least economically, which is the only factor that seems to count anymore--by nation states. It is controlled by corporations, by plutocrats, by the elite. It seems to me that this is both a terrifying condition, and also an opportunity.
When will the church of Jesus Christ, aka the People of God, take their place as agents who actually make a difference in the world? Just to be clear, I'm definitely not talking about orthodox political power. When will we as followers of Jesus reconfigure our lives in such a manner so as to undermine this unacceptable situation? When will we realize that we have spiritualized our faith to such a degree that it no longer has an impact on what occurs in our world from day to day?
Those aren't rhetorical questions, friends.
UPDATE: Just saw this article that my be of interest:
Groups to shine light on dark side of capitalism
(Reuters) - Several groups will shine a spotlight on the dark side of capitalism when leaders from the world of business and politics convene for their annual meeting in the Swiss ski resort of Davos.
UPDATE 2: I realize I'm beating a dead horse now, but this line from a forumblog post this morning bears repeating. There's nothing really new here for us; the post is announcing the release of the two reports we've already touched on: The Global Risk Report 2011 and the Sustainable Credit Risk Report 2011. Again, it's the language that gets me (emphases mine).
"[E]arlier this week we released the Sustainable Credit Report 2011. The research highlighted that over $100 trillion of additional capital will be needed to meet expected GDP growth over the coming 10 years. The sheer scale of global credit expansion poses several significant risks, particularly related to Asian debt markets, funding of European banks and the spectre of financial protectionism. These issues will also form an area of RRN inquiry."
Forgive the repetition, but I'll point out again that if intervention is needed, the outcome cannot be expected (without that intervention.) It's like a loop:
- Someone determines that we desire/need/want this level of global growth (outcome)
- In order to achieve that growth, we need massive global credit expansion (intervention)
- But that scale of credit expansion is exceptionally dangerous (risk)
- But failure to achieve those growth targets contain their own risks (no one is mentioning this part)
- So, we'll do our best to manage all these risks in order to achieve the desired out come
So the way I read all this, the WEF's ironically-named Risk Response Network is not simply responding to these global risks, readily acknowledged. It is actually creating them.
Personally, the next iteration of the church that I'm looking forward to is one that has something to say about all this.
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