economic debt

Greenhouse gas debt...

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Homo œconomicus has built the contemporary world to match the growth of market values. This is both its credo and its fuel, everywhere in the world today. When growth is lacking, then debt is created, both public and private, to sustain or revive it. In fact, this is the only way we have ever used. 
 
A We are now at an unprecedented level of global debt in the world, higher than it was in 2007 at the beginning of the last financial crisis in the United States. And in fact, in the world that debt alone has thus globalized, excessive risk-taking by investors (particularly those in the "Shadow banking. which doesn't miss an opportunity... not to invest!) likely to turn into a (debt) crisis are at once more numerous, more varied, more powerful, and partly more unpredictable: they cause fires (bubbles, it is said) that threaten to burst here and there, today or tomorrow, in multiple places and sectors with effects that are said to be systemic in order to make it clear that the deleterious effects are considerable.
 
Where to put firewalls? It's very difficult to say, and more difficult to do, in anticipation. Excessive risk-taking often happens among investors, but the fact that it is most often concentrated in high-yield sectors such as real estate weakens productivity just about everywhere, and this then prevents growth from restarting on a non-revenue basis, i.e. through productive investment (with innovation in work, in products, with infrastructure, education, health, etc.). This was the case in 2007 in real estate in the United States, where a lot of money was lent to people who we knew would not be able to pay it back. And it is still the case today (in China, in particular but not only, which is adding its weight to the financial globalization of the planet). No brakes induced by experience attacking the causes (in other words, the speculative addiction of actors to the colossal power of risk transfer) seem possible!
 
 
So much so that today, by barely pushing the reasoning and generalizing it, we can say that there is no one left to pay back, and even to show that we can start to do so. All budgetary and monetary instruments have been used, some of them to their maximum. States are highly indebted and can no longer rely on their taxpayers; banks have barely recovered since 2007 and lend so little to companies that their social utility is called into question; central banks have been "doing the job" since 2008, but they no longer have any room for manoeuvre. (1) Finally, households - no less indebted - are being lent too little money to support growth, ensure a minimum of social cohesion and avoid populist excesses and despair everywhere.
 
The financial markets know all this, of course! The still recent idea that some Authorities had the duty to "reassure" them is perhaps already out of reach, because they are much more nervous than we think and than we say, since nobody has a viable solution to guarantee these debts, except to resolve to consider multiplying violence all over the world in order to be reimbursed (we "killed" Greece, but, after all, we can "kill" other countries...); we've killed millions of peasants around the world by bringing down the price of raw materials, but we can still bring ourselves to increase the carnage,...; in short, there would still be room for improvement!). 

 
 
The global atmosphere is as if poisoned by an unfathomable debt, which potentiates the "externalities" it generates without controlling them, such as a greenhouse effect that would produce in partially unpredictable places climatic accidents at regular intervals (1986, 1993, 2000, 2007-2008,...?). So? Should we envisage - firewalls - a movement of economic demon-globalisation? No, other than a frank revision of the conditions under which markets and so-called international "free trade" operate. On the other hand, a financial deglobalisation, yes! and quickly to reduce the pressure, then reassign responsibilities at the heart of these pseudo-markets! All this without damage? No, impossible... everyone will have to take their share of the losses if the collapse proves to be inevitable... And among these shares of losses, there are those of countless individual and collective projections, in the world, and in Europe too and again! 
 
Can Europe, precisely, stop this movement that is escaping it and dragging our societies into the depths of a logic of total moral hazard? (2) ? Only last year, it believed that it could count on the Juncker Plan to revive non-rentier growth (€300 billion) on a continental scale, and thus avoid a general decline in productivity. But its commitment seems to have been short-lived: it would have neither the support of the banks nor the support of the states, which today make no plans for future joint investments in Europe, particularly in the ecological and social transition (I never separate the two dimensions). And the citizens who were at the point of petitioning to encourage such a recovery, focused on the long term, must put away their illusions. (3)
 
It is not usual for observers of the world financial situation to be, as far as I know, almost unanimous in thinking that we are "in trouble"! Do we only have to hope that the observation of this common and lucid impotence is the product of an artefact which, like a gri-gri with magical powers, would protect us from a catastrophe?        
  

 
 
(1) ... Although, in this world without a compass, there is no shortage of ideas on the side of financial geoengineering (see the article by Jean-Marc Vittori in Les Echos of 15 March 2016 ) !

(2) Reference is made to the section "(2)". Financial market companies, total moral hazard companies "UP Magazine, January 2014.
(3) See the "Address to European political leaders", Brussels, 4 December 2014, on the occasion of the "European conference on the long term" - Confrontations Europe - Europe needs all of us to write its future on 3 and 4 December.
 

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