Could this recession kill the modern Western economy?
Wednesday, May 28th, 2008I’m a bit concerned that it might…
1. Food and fuel prices are sky high and there are no signs they will return to the levels of just 1 year ago.
2. Most of the UK’s economic growth in the past decade has been fuelled by easy borrowing on the never-never - and that bubble has pretty fundamentally burst. Unaffordable housing is only part of the debt disaster.
3. The UK does not make anything anymore - all we do is “add value” through services - but when nobody can afford the services any more how do we generate any money in the country? We can’t.
I am naturally a cynic but I do worry that this recession is going to hit us on a far more fundamental level than anyone had imagined possible. Will it be the trigger for the re-emergence of China as the worlds most important economy? Have we given them the key to economic success through our desperation to outsource all the dirty work? I think that maybe we have.