GLOBAL FUTURE ANALYSIS
PROBLEMS | PASSIVE POLICY
When there is no awareness, much simplicity and no vision, there will be no much policy making happening. Laissez Fair is the main policy. Every government should already had their ToDoList with priorities and budget estimates at hand for addressing the effects and consequences of the Credit Crisis and the Energy Crisis (plus the Water Crisis and the sequential caused other crises by these initial crises). ToDoLists full with adjustment actions and maybe also some emergency response models if things really collapse. There is a reason for the ToDoLists: If you don't know what to put on it, the only thing you can do is hoping that the clouds will be blown away. But the Credit Crisis and the Energy Crisis will no go away: they are real, as real as anything can be. Policymakers with some brains and time know this. They know the problems of the Credit Crisis, Energy Crisis and the Water Crisis, but they don't have adequate answers for these problems available (yet). So they just push these issues forwards into the future without taking them. You can't expose a problem or a series of problems when you don't can deliver adequate policies to address it. And of course there a lot wishful thinking by policymakers, politicians and governmental officials/bodies. This is like the financials who all delay their downwritings in expectation of a miracle on the US economy and thereby housing market. Something that still can happen: the absorbance/power of the market/economy is huge. If the US stops consuming and (backed by the cheap dollar and therefore attractive export prices for their products) starts working/exporting their high quality equipment and knowledge. But even then: the costprice of the US consumption on credit is far too high in the world market: the US economy must be redesigned to lower cost levels and consumption must be backed by economic production and no longer on lending against each economic odd/reality. This is not something of lowering wages. On minimum wage there is already much budget for the most simple basic life. This is something of cutting each unnecessary budget taking issue. From energy to (governmental) overhead. Not exporting freedom while the own economy is sinking. There is global a passive policy ambiance because everybody hope that the US economy will bounce back. But bouncing back can not be done by credit. Credit is overused and lost its beautiful capabilities by overstretchiness policies. One beautiful superior system (money creation based on loan creation based on fractional banking) is overloaded itself too much and has collapsed. The interbanking balance differences (basis of the whole virtual loans based money creation system) is collapsed. Credit is based on payment behaviour and trust. Both has gone bad. Passive policy behaviour is attractive when there is still hope. Hope for the Credit Crisis (a new president who can restore US imago in the world, US exports that skyrocking within half a year and tune the US economy wisely so that the US become costprice competitive on the world market) is still a valid option (only the US can't deliver on supplier credit anymore, and has one of the new presidential candidates any plan on a not painful but smart redesigning of the US economy/government?). But it's not only the Credit Crisis, it's only the Energy Crisis, hitting the most energy consuming/wasting nation (as the US is) both per inhabit and per dollar earning severely the most. Not underwriting Kyoto will be listed as one of the economic mistakes of the Bush Administration. As European manufacturers has pushed to make their processes energy effective, the US manufacturers are stocked with (now due too high energy prices) too expensive production models/processes for the global market. The US was getting old, Asia was young and Europe went 'young' due to underwriting Kyoto. The Energy Crisis turned the odds for an American recovery worse. Put in this picture, the capital drain due to interest on debts (as money creation will be halted or inflation will go to skyrocking / ravine edge levels) and energy imports: Foreign nations/economies tax the US earning severely. An own chosen direction of the US it's people and administration. Plus also take in the picture the Water Crisis that is rising more and more in huge parts of the US, cutting severe in her agricultural production (and therefore export earnings). The changes for the US are thin. The hope that the US will recover is the foundation under passive policy. But considering the fact that the Credit Crisis has the actual size it has (not the small yet disclosed little size, but the real big yet undisclosed size), the Energy Crisis joined the Credit Crisis, a Water Crisis is growing and the fact that changes and restructuration will be very tough for the next president (who inherit a total wrecked economy, financial system, debt position and currency) in times of severe head winds caused by crises and the consequential crises, the odds are different than in the past and therefore bad. Passive policy is based on wishful thinking by less analyzing and less courageous leaders. No matter if they're corporate or governmental: less policies are made to survive the bad weather, therefore the bad weather will hit severe. We have not much policy/courage we can be proud on. Passive policy is for losers. We are losers. Beautiful weather sailors, that goes down when the first bad weather arrives. Cutting in budgets is not addressing policy, turning economies so that they survive the Credit Crisis, the Energy Crisis and the Water Crisis and all the consequential crises they course: that's active policy making for companies, households and governments. No awareness stimulation, keeping simplicity in full honour, not taking time for vision and policy making based on these three: That's passive policy. We're blessed to collapse with it. We got the leaders we want / have chosen. They are just an bunch of smooth 'happy day' 'are back again' talkers during the day, not capable of leading us through the evening, nor the night of giving us a new dawn. In Holland we have a Minister of Economy who denials PeakOil time after time (as oil major CEOs state otherwise), a Minister of Finance who denials any impact of the Credit Crisis to the economy of Holland (while Holland is very much dollar bounded in turnover and assets and a heavy weight owner of vaporized CDO values and US real estate by its major pension funds). It's time for leaders to get in touch with reality or for nations to vote for new people that has shown some actual knowledge and has done some reality analysis. The 'if everything goes down, everything goes down' attitude must be become unacceptable for leaders. Leaders who say so / think so must resign. We need really real leaders that really wants to guide us though the storms of the Credit Crisis, the Energy Crisis and the Water Crisis (and all their consequential crises) by restructuring intelligent/appealing not by just negative force/cuts but by adjusted model creation of a new dawn for to this facets adjusted prosperity. The new president of the USA will face half a trillion budget deficit a year, with the declining trust in the health of the US only to be financed by the purchase of Treasuries by the Open Market Committee of the FED. The actions of the Open Market Committee has extended the last phase of the American Fairytale of consumption based on debts instead of earning by production, but as the Credit Crisis came to the surface the problems got too big to handle by market activities based on digitally created dollars by the Open Market Committee. That the world accepts such thing as the Open Market Committee is an economic wonder, but its influence is overstretched: if this system of non disclosed market interventions continues the Open Market Committee has purchased all shares and bonds available Wallstreet, because everybody wants to sell and nobody wants to buy. The Open Market Committee model of sometimes short intervening in markets by supporting them was beautiful, but they has not been able to resist the temptation of doing it often and long. Now nobody knows what trade on Wallstreet is Open Market Committee supported (and thereby artificial) and what trade if a real market trade. If you have a medicine and you don't use it wisely, you end up with severe situations and no medicine. History will learn that the last 8 years of trade where partial a printed money based fake fairytale. The pain is moved/pushed forward by chicken leaders and now has moved from severe pain to real mortal threatening status. The babyboomers don't like pain, they have tried to push it into their children's future, but time just ran out as they want to retire, so they and not their children are confronted with their own behaviour. The USA is on intensive care, getting intravenous oxygen from the US central bank, backed by a government who want to lend excessively against lowest possible interests, so that budget deficits growth not found high interest rates as road blocks. Together they manipulated shares, bonds and treasuries markets for some years, holding up appearances of demand for shares, stocks and treasuries. Stocks in de whole world went down, but Wallstreet stand fear. On quick sand. The maximal stretch of this non market behaviour of market influence is reached when the amounts became too big to handle). In any other business this should be named as can artistic behaviour. As state above: the Credit Crisis can only be addressed by having a plan to rescue or replace the own currency on the shelf. The only thing governments can do right now in addressing both the Credit Crisis and the Energy Crisis (any maybe also the Water Crisis) is inform their nations (companies, households and inhabitants). This takes real courageous leaders who wants to serve their nation regardless their popularity and are not afraid to been 'shot' as the messengers of bad news often are been and often will be.
Author: Gijs Graafland
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