This week will the economic domino wobble or fall?
August 7th 2011. 9pm
Within the next seven days the world will decide on what will happen with stock markets around the world. Within 12 hours from now the Australian Stock Exchange will open for business on Monday August 8th.
For some time I have argued and promoted that economic growth; consuming out of balance without consideration of sustainable resources; is a designed for demise model. The world is living on a credit card that it cannot and does not intend to repay.
There are many such issues with the current ‘business and living as usual model’ that we are now encountering. Climate change is accelerating out of balance with how we can adapt. Resources are being depleted out of balance with how the future generations will continue to need to consume. We are living on a global credit card with a finite credit limit.
As the Cree Indian prophecy proclaimed “Only after the last tree has been cut down, only after the last river has been poisoned, only after the last fish has been caught, only then will you find that money cannot be eaten.”
Within the next week the economic domino may fall. It may only wobble. But the certainty is that if we continue on the current path of demanding economic growth without regard to the finite outcome…….it will fall.
Excerpt from the book ZERO Greenhouse Emissions.
They could see that the business as usual model adopted and passed onto developing nations, irrespective of any of the Kyoto protocol aspirations, presents a high threat of pushing the global thermometer to four, five or even six degrees of warming by 2100. They now knew as with finite resources it was not if, it was when. And it wasn’t going to be later, it was sooner. When would the circle of economic dominos start to fall, and just like a hurricane, where would it strike first?
Around the world the business-as-usual model of the economically powerful was at risk.
What would be the eventual effect of increased concern for the security of investments? What about the global investment domino? Which investments would be safe and which at risk of panic? Who would panic first? All linked through the Dow Jones, the S&P 500, Nasdaq, the FT100, Nikkei, Hang Seng, the Dax and All Ordinary Index, who would blink first? Which of the growing market concerns would start the selling? What would be the tsunami effect of a market panic? With corporate globalization comes its risks, with corporate diversification of interests, comes cross losses. Who would report the story: “Blue-chip stocks are no longer a good investment for the long haul, the long haul looks a bit shaky! You need to get in quick for a high return and get out of the market before it crashes!” And what of the term “Market Correction?” When I was at school and the math teacher corrected my work, it meant that I had done my sums wrong! How many chances to get it right do these experts in economic finance need?
Are those industries that are exploiting resources identified as in decline at highest risk, or will they be the ones who initially profit from the demand in commodities as the prices rise, while there are still reserves available?
Well within the next week we shall see if the domino wobbles or falls.
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