While the G20 worship the generation of false wealth we are forced to accept Governments that defer the costs of progress in favour of far more false wealth as a solution. The holy grail of a system that has cheated itself to the Nth degree is becoming a groaning machine capable of blowing gargantuan bubbles to solve the crises of accumulating need of the many to sponsor the largess of the very few.
These huge mountains of debt – what did they buy exactly? Where are the assets? Consumption is not an asset but it is seen as the path to salvation. Growth is not growth when it is only capital expansion in the face of long term poverty. It is the system itself that is out of control, the way in which the steam valves we call markets are manipulated and political decisions that flow from the rationale of a committee of naked emperors.
Producing exponential movements in capital exchange is seen as a solution. UBS recently learned the hard way the equation that for every winner there is going to be many losers can be reversed. What sucked Lehman dry was bad mathematics and a total disregard for consequences, an aggressive form of global gambling is simply not going to solve the actual dilemma the markets face. What we are measuring is not real economic growth, it is a deferment of responsibility.
As the markets fall capital moves away from reality and into assets that are deemed safe. The market mechanism is a great tool that has been badly abused by greed to the power of political expedience.