I wish I could put my finger on it, but there is a huge disconnect between economic reality and the current financial situation across most of the world. It seems to me, perhaps simplistically, that every central bank is simply issuing money to generate growth and this can't be sustainable. Our biggest industry would appear to be buying, renting and selling assets to each other.
My apartment overlooks a city of 1 million people in the UK - I estimate generously that 50,000 of them are economically productive in the sense of producing something of value that can be 'exported' from this city. The other 950,000 must live off that value - it doesn't make sense. All factories are flattened to make way for apartments. Any industrial development is of distribution centres for breaking down pallets of imported tat.
I don't know what this will lead to - perhaps it's the collapse of the Euro, the rise of some stable currency that isn't playing this game, or an opportunity for a new currency (crypto or something that we don't have yet).
Just as the LIBOR scandal revealed that commercial banks were just making up numbers, so I believe that central banks are doing the same with each other and trust will need to be removed from the system.
I’d be interested to know what city you’re talking about. Are you limiting ‘something of value’ to manufacturing? A great deal of the UK economy is service based. I’d be amazed if only 5% of the city’s population were producing goods or services used by those outside the city.
>I estimate generously that 50,000 of them are economically productive in the sense of producing something of value that can be 'exported' from this city.
I'm confused, are you saying that services don't have value? It feels like an artificial distinction to me, for example watching a movie at a theater vs buying/renting a movie both provide me similar value. Also, in a world of increasing automation and globalization # of people is perhaps not a great metric.
I'm not really sure if the economy is in as good of shape as it seems. At least here in the USA we're hitting an unprecedented period of economic growth; the Keynesian in me believes that policy has prevented at least one recession in the 2010s and led to real growth in the economy, but it's very possible we're just in for a bigger fall in the 2020s because of it.
I reckon the percentage of people contributing to true economic production is probably higher than any point in history. Think about how much of human history is subsistence and survival.
You're ignoring domestic demand. When you buy something at the supermarket the biggest chunk of money goes to the local workers meanwhile farmers only get the wholesale price.
My apartment overlooks a city of 1 million people in the UK - I estimate generously that 50,000 of them are economically productive in the sense of producing something of value that can be 'exported' from this city. The other 950,000 must live off that value - it doesn't make sense. All factories are flattened to make way for apartments. Any industrial development is of distribution centres for breaking down pallets of imported tat.
I don't know what this will lead to - perhaps it's the collapse of the Euro, the rise of some stable currency that isn't playing this game, or an opportunity for a new currency (crypto or something that we don't have yet).
Just as the LIBOR scandal revealed that commercial banks were just making up numbers, so I believe that central banks are doing the same with each other and trust will need to be removed from the system.