Sunday, August 9, 2009

Another clueless idiot

Read an article in one of Sweden’s biggest newspapers this morning and again we are being told that ”this is isn’t so bad” referring to the current economic crisis. Anders Bolling is the journalist trying to convince us. Bolling is one of those optimists, a group I myself belong to most of the time. Seen over time things have been getting better for the overwhelming majority of people on this planet and in several articles and in a published book Bolling have, for the most part, accurately described this reality. However, there are several aspects to this crisis he fails to take into account and those are the reason why I, in this case, do not believe in a happy outcome.

Even if Bolling do address our debt accumulation and he do mention that this is a problem; he does not mention - probably because he does not understand it - that this debt has soured to such levels that they have become a problem in themselves. Being in debt is not really the problem, but being in debt in relation to other things, however, is. Firstly it’s not only the state budget and deficits that needs to be counted, but also all the mortgages and credit card debts among the populace. And this is only one part of the problem. This debt also needs to be related to our ability to produce and, as consequens, the real wealth creation in society. I am not talking about GDP (BNP) as Bolling mentions in this article, no, what I mean is real production capacity and what we actually produce. In GDP we add services, governmental as well as private services, and services is not really the same as wealth. It can make our lives easier and as such create “value” in the form of additional time or better haircuts, but it is not really the same as wealth. In GDP we also add such things as snow shovelling or cleaning up after a Typhoon which is why the current weather hitting the shores of China will in fact increase GDP because the cost is actually a plus when it comes to GDP-bookkeeping. And do you know what’s not calculated into GDP? Debt. As long as we borrow and spend more than we pay back on loans it will only increase what Bolling and cornflake economist’s regards as “wealth creation”.

What also need to be addressed is where some of the “recuperation” comes from. Partly in relation to what has been mentioned and partly in regards to the massive amounts of newly printed money being thrown into the system we can see some “green shoots” in several economies, also the Swedish one. Not that it has stopped the down going spiral; it has only halted it somewhat. Unemployment is till rising, several important businesses is still in red ink and things are only going “thanks to” artificially low interest rates, but it’s not as bad as it was - hurray…

Another thing that needs to be taking into account that’s not mentioned in Bollings article is Sweden’s almost total dependents of trade. And two of Sweden’s main trading partners are UK and the US – two countries in the deepest of all shit piles. One can argue, and rightfully so, that if trade does not go up and if the recession (in reality already a depression) keeps going there will not be a recovery for Sweden. To this we also need to add the coming collapse of the USD and the consequences this will have on commodity prices and the world markets and how this will have serious impacts on the Swedish economy.

The main concern we should have is - together with all mentioned - the bubbles that have been inflated in the economy. Housing prices are still very high and have several months during this year even been going up, when they in reality should be going down. Also, all those borrowed and newly printed money that has been given to banks have mainly been put to use on the stock market which means that many stock prices are at a higher level than they ought to be.

All in all, Sweden is in deep trouble. Not as bad as many other countries because the center-right government haven’t been going on the same spending spree as most counterparts and my fellow countrymen still produce things, but it is bad enough. Only looking at my birth nation it would be okay. The bubbles are bad, the debt accumulation is bad, the real wealth creating is to low, but with only eyes on Sweden, it might not be so horrid and it is possible that this slump wouldn’t last much longer. But factor in the trade dependency, the coming crashes that will occur in other countries, the collapse of the USD and the paved road towards socialism and we have a catastrophe on our hands. I do believe that Sweden, in the long run, might be better off then many other countries, but that notion is dependent on my countrymen not moving the country further towards socialism.


  1. Vad skönt att veta att det finns en elit intelligencia som du. Då kan vi alla andra idioter fortsätta luta oss bakåt i våra bekväma ikea fåtöljer och se på medan dina överstepräster av ekonomer kör hela världen och naturen i botten. skål ta mig fan!

  2. Hm?

    För det första har varken jag eller mina åsikter något som helst med världens elitkår av korkade ekonomer att göra. Tvärtom, vilket du säkerligen också inser om du läser det jag skriver. Centralbanker, politiker (i alla läger) och förståsigpåare agerar och gör raka motsatsen mot vad de borde göra. Ivrigt påhejade av nyttiga idioter som denna Bolling.

    För det andra har du en poäng i att ekonomer (men mestadels politiker) kör världen i botten. Något du också inser om du faktiskt läser detta inlägg såväl som andra.

    Slutligen; Skål!

  3. Antar att roland likt mig gillar socialism & därför reagerade på ditt inlägg negativt. Jag däremot har läst en stor del av dina inlägg i år & gillar det du skriver, fastän vi inte sammanfaller på samma ideologi, i slutändan spelar ju ideologi inte så stor roll då makthavarna har egna intressen som går före dess partipolitik. :)

  4. Jag undrar om det inte är dags för libertarianer (och annat högerfolk) och socialister av alla läger att slå sig samman, göra uppror och sedan gå skilda vägar. Ni kan få Asien och Europa, så tar vi Nord- och Sydamerika. Vi delar Afrika på mitten. Sedan kan förståsigpåarna, politikerna och ekonomerna få husera i Australien. Låter inte det som en lämplig lösning?

  5. haha, tycker det låter som en klockren lösning :)