World economic condition

[unclebulgaria67]

I keep an eye of what is going on around the world to see whether the problems the UK experiences are unique or just part of the current global situation. I quite often find that other countries are experiencing the same issues at the same time, because of the nature of the worlds markets being very instant and connected.

 

Take for example Supermarkets, where in Australia a big chain there Woolworths ( no connection to UK shop) is experiencing some of the same issues as Tesco. Woolworths has just recorded a huge overall loss.

 

http://www.smh.com.au/business/retail/woolworths-slumps-to-1234-billion-loss-20160824-gr0dvl.html

 

Since the 2007/08 world Banking crash, the economic situation has become very odd to say the least. Central Bank interest rates have reduced to close to zero and some Banks are even charging for accounts holding large credit deposits. There appears to be a focus by central Banks and government to help maintain property asset prices, as if property starts to reduce in value, the Banks holding them as assets would be stuffed. This means that property prices across many parts of the world are not affordable to many workers, who have seen earnings reduce in real terms.

 

The large global corporations such as the big drug companies and tech firms are currently trying to reconfigure their businesses, by selling off parts or buying other businesses outright or parts of them. China is speading its investments into many different things and is now the largest investor in North Sea oil.

 

Have a scan through the various online media reporting on finance and you will see there is a pattern to what is going on. Businesses and government appear to be preparing for a recession on the horizon. In the UK, i can see the chancellor Philip Hammond taking measures in an Autumn budget, as he sees a deterioration in government finances. Given the straight jacket he is in politically, i think it will be extremely difficult. There is not much room for spending cuts and what taxes would he increase. Increasing government investment spending is difficult, given the amount of national debt.

 

What are your thoughts ?

 

In 2017 will there be a repeat of the 2007/08 financial crash, as 10 years after it is found the same fundamental issues exist ?

 

Will Brexit be put on hold, if there is another crash ?

[trebormoinet]

My view is capitalism has a terminal illness and what we are experiencing is a long drawn out death, what will replace capitalism is debatable but what is certain is that the quicker we find a replacement the better.

 

Although I do like the idea of helicopter money which is being mulled over by top financial analysts to jump start the economy into life, but it will only be a temporary fix, the death of capitalism is inevitable and happening right now.

 

So in my opinion the long term prospects at the moment is uncertainty and no investor likes that so a downturn guaranteed.