The Financial Times reported today that for Britain to recover from its current economic status it would have to return to the old fashioned custom of only spending and investing what the nation has in savings.
The UK has long suffered from the Capitalist disease of greed and consumption and living beyond ones means. This in turn contributed to the artificial economic boom and subsequent bust we now find ourselves in.
The implication is that a sustained economic recovery depends upon a major rebalancing of the economy - less consumption, more savings …

News that 10 US banks have failed the US Treasury’s ‘stress tests’ should not be surprising.
The capitalist baking model is flawed. Most intelligent commentators recognise that no bank is too big to fail. Banks create credit in multiples of actual Tier 1 capital such as cash and equity. By definition there will always be insufficient funds in banks if all depositors and borrowers came calling irrespective of the size of equity in a bank or how deep its pockets were. Indeed, attempting to rescue really big banks could potentially bring …

Martin Wolf, FT commentator, derides as absurd  gold replacing the fiat currency standard. We certainly live in strange times when the pick of so-called intellectual thinkers in the west considers gold, a currency with stable intrinsic value that has stood the test of time over centuries, unsound in favour of valueless fiat currencies, which are propped up by little more than the confidence one has in the governments that print and issue them.
Indeed, to appreciate the absurdity of fiat currencies need look no further then Zimbabwe today: Zimbabwe inflation hits …

The International Monetary Fund’s latest Global Financial Stability Report has provided some conservative estimates of the potential global losses from bailing out the flawed capitalist financial system. According to the IMF, governments around the world will lose an estimated $4,400 billion on the loans and guarantees made to the financial sector over the last 18 months or so.
$4,400 billion is the total value of all the good and services produced in 2007 in Japan, the second largest economy in the world. Yet this is a conservative estimate as it …

Today’s Guardian reports that “The British government is confident it will find buyers for the record number of gilts it will issue in the coming year to cover the enormous budget deficit.

What is astonishing is that despite the current downturn being a direct result of the debt culture that was fuelled by the now notorious Sub-Prime mortgage sectors we find that the Government feels the only way to get us out of this mess is to continue this cycle of debt by nationalising private debt and selling it on in …

 The Wall Street Journal reported today that Citigroup and Bank of America have both been told that they must raise billions of dollars of extra capital. The stress tests conducted by the US government on 19 banks found that Citi and Bank of America both need more funds to cover future losses caused by the economic downturn.
 This report therefore suggests the financial crisis is far from over.
 For the last month various politicians have attempted to talk up the prospects of a recovery as both nationalization and continued stimulus packages …

Today the UK official statistics department, the Office for National Statistics, confirmed what the country already knew -the British economy has been shrinking for three consecutive quarters. The UK economy shrank 1.9% in the first three months of 2009, this has been the case for the last 3 quarters, if the 0% growth in the second quarter of 2008 is included Britain has been in recession for a year.
 Whilst a variety of British politicians have attempted to conceal their failure in stemming the financial crisis Britain has all the …

In an op-ed piece in yesterdays NY Times Bob Herbert has highlighted the growing humanitarian crisis in the US,

It is a tradition among the capitalists to defend their failures by citing other successes. To make it worse, the much touted success is applicable only to a narrow section of the soceity and for the rest it is nothing more than relatively-better-failure. The repeated crises or busts are a consequence of the nature of boom in capitalist economies. It is like an athlete who takes steroids for narrow short-term success to the detriment of his long-term health. The ingenuity of capitalism is to make the recipients of the boom …

Free market ideologues always have an argument when the ‘market’ fails do to its job. Rather than look at alternatives they constantly prep about different forms of Capitalism being the way forward.
A variety of models have been used in the post WW2 era from the Asian ‘tiger’ model to the globalisation model Latin America adopted in the early 1990’s.
The current financial crisis has given rise to two further models of Capitalism namely the Baltic model and the Nordic model. The Baltic model just 2 months ago was placed in the …