The Global Economy like a rocket needs to reach escape velocity to attain stable orbit, this takes inordinate amounts of rocket fuel or in the case of the current economic crisis money. Over a long period the developing Global Marketplace has been hailed as mankinds future where all would be rich (but naturally some would be richer than others).
Investment Banking was seen as the financial equivalent of perpetual motion doing away with the need for actual production as vast paper profits were conjured up by shuffling squillions around in cyberspace, (already the subject of numerous ascerbic comments here). Primary production of food and raw materials has long been elbowed aside by the financial services sector, merely being regarded as a pawn in the headlong scramble for ever greater profit.
As predicted it is now ending in tears as the financial rocket, not quite attaining escape velocity, has run out of fuel (money) and crashed back to earth in a most spectacular manner. The opening decade of this century has certainly produced some spectacular events both man made and natural which are affecting mankinds health, wellbeing and security at an accelerating pace.
The natural events are almost certainly part of the Planets timless natural cycle largely beyond our control despite the arrogance of sectors of humanity professing to have the answers. This flies in the face of the strong case made by many for Global Warming. I still feel it has more to do with creating yet more insane markets in things like carbon trading than genuine concern for the Planet, effectively yet another lifeboat for financial Phillistines.
The man made element is almost entirely self inflicted and largely attributable to pure greed and incompetence which throughout history has invariably culminated in disaster. Lessons have obviously not been learned from history, particularly the dot-com bubble, so it necessarily follows that an incredibly hard one is being delivered currently.
Despite this awful outlook there are billions of people operating at grass roots level who while vulnerable to the fallout who will continue to function albeit possibly at a lower level. This is where the real wealth lies in countless small communities where people will be forced forced to pull together to weather the storm. Being fortunate never to have experienced a serious war situation like my parents had to this is how I imagine it may become. The wealth in question extends beyond money and encompasses expertise, tenacity, commitment and humanity that will ensure the survival of the fittest whatever the challenges to be faced.
While things may be hard and difficult for us all for a protracted period a hefty dose of financial stringency and a little deprivation may not be so bad if it forces us collectively to re-assess our priorities and aspirations.
Not knowing what another day in the madhouse holds in store, yesterdays momentous events saw both equities and oil take a dive as the US bailout plan failed to get ratified. Brent crude opened yesterday at $101.10 losing $5.17 to close at $95.93 after a previous week that saw the biggest one day rise ever. The current performance gives credence to the theory that no one actually knows what is happening or more ominously what will happen.
The one current element that is amazing me is that our trade is actually remarkably steady as customers take a very philosophical view of the chaos above and get on with their lives. It reinforces my comments on life at grassroots level and induces a little optimism into an otherwise bleak scenario.
















