The warnings on the economy are coming thick and fast now, both globally and nationally. Here’s the head of the World Bank:
World in new economic danger zone: Zoellick
The head of the World Bank says the world has entered a new economic danger zone and that Europe, Japan and the United States all need to make hard decisions to avoid dragging down the global economy. …
“They have procrastinated for too long on taking the difficult decisions, narrowing what choices are now left to a painful few,” he said, according to a prepared text of his remarks, which come ahead of meetings of the World Bank and International Monetary Fund next week.
The meetings of global finance and development leaders in Washington will focus on Europe’s debt crisis and the risk of a Greek default, which has led to growing alarm in financial markets.
Mixed signals from European leaders have escalated concerns the 17-nation euro zone may be unable to unite behind a common approach to tackle the crisis.
Here’s our very own Governor of the Reserve Bank:
Bollard downbeat as interest rates held
The Reserve Bank governor has painted a grim picture of the economy this morning as he held interest rates at 2.5%.
Dr Alan Bollard said the economic situation was deteriorating internationally and NZ would be affected. … Europe’s debt crises are worsening, particularly in Greece, and there are reports today that EU leaders are being warned a “second credit crunch” is on its way. …
He said debt concerns in Europe and the poorer global outlook means international bank funding markets are tightening up….
Commentator Gareth Vaughan, from interest.co.nz, told TVNZ today that the world picture has again got “very murky” and it will affect New Zealand. “We are a country that relies heavily on exports and a lot of the big export markets around the world are in serious trouble,” he said.
Part of the problem with the “Western” economies is that the greed of the elites is destroying the “middle class”. I’ve written on this before, in NZ the accumulation of ever greater wealth by the already wealthy is squeezing the life out of the economy. See also this excellent piece on the same effect in America, “The decline and fall of the American middle class”.
Bigger picture, what we’re really seeing is the wheels falling off two of the fundamental but unsustainable assumptions of capitalism. First the concept of money as debt, and second the assumption of infinite growth in a finite world. Its looking more and more like we’re never going to recover from 2008, and the whole global economy is about to head straight down the gurgler.