The Declining State of the World Economy

The Declining State of the World Economy

The economy of the world is not declining.  The definition of what we consider a valuable commodity is changing.  If one were to take a look at his or her own stock portfolio or 401k and compare it against the times that one possesses around one’s own house, what would be that comparison?  Walking into the pantry, how much stock is placed in the future seasons of wheat coming to harvest?  How much weight is given to the microprocessor which runs the refrigerator or cellular phone?  Quite simply, it is not likely that one would throw the crux of one’s own nest egg onto commodities due to their steady increase over time.  People whom want to retire in ten or twenty years, which constitutes the bulk of investors on the market, want instantaneous results.  So the service of handing one’s hard earned savings over to a stranger, for the purposes of making calculated risks (called “gambling”) on the open market, has become common place because not many folk want to wait thirty or forty years to see a return.  Conversely, traders and hedge fund managers under pressure to provide the needed capital for those reaching retirement, have to ensure that the money exists to supply those accounts while continuing to make money for its current accounts.  This creates a wild deviation from what is considered an economic resource and what is a convoluted gambling game. 

According to the World Health Organization, over 7.96 billion people exist on planet earth, with an expected breach of 8 billion to occur in the next decade.  The planet derives its crops, its fresh drinking water, and every mineral and resource we rely upon for survival from about 4% of the earth’s crust, utilizing USGS survey data.  Over 96% of the world’s transportation relies upon hydrocarbons and petroleum products.  Not to just throw numbers out there, but taking a look at the price of commodities over time, such as wheat, gold, crude oil, and lithium, it becomes readily apparent quickly that fiat currencies and the international banking system, while attempting to regulate and standardize monetary exchanges across the world, have actually opened up a Pandora’s box.  Once world governments are able to freely ignore the basic principle of macroeconomics, Denham-Stuart’s “Supply and Demand” (1796), they open the door to unscrupulous gamblers and bamboozlers, dressed as bankers, to begin gambling their monopoly money away.  This has resulted in a rapid inflation of the prices of basic and valued commodities, higher than would normally be expected due to simple inflation of the fiat currencies.  Coupled with the advancement in technology and microprocessors, and an increasing reliance on precious metals such as Lithium, Thorium, and others to make those technologies possible, the global market finds itself on the cusp of what could be considered a triple threat.

While the purpose of this article isn’t to instill an unholy fear of economic Armageddon, it is important to state that the commodities required to keep the human race alive and well are still available for possibly several more decades.  There is enough petroleum and natural gas to keep running cars down the busy and bustled freeways and enough wheat to ensure every household in the world gets a loaf of bread.  And while saying that, it is also important to realize that the conditions on this planet are changing.  It is heating up.  It is changing the way the world works.  We are dependent upon the planet for the resources it provides us.  There is no amount of fudging the numbers that will correct for ignoring that commodities are directly linked to the planet.  And when the only system available is through trade, it is even more important that those systems remain trustworthy.

What is being experienced, on a global scale, is a distrust of the holders of the purse strings.  Those whom make the rules for how the system is played have become inherently ignorant of what goes on beneath their feet.  Thus, the economy is due for a massive correction as more and more people realize their best interests do not rely on the global markets, but in their own local economies.  The tomato farmer down the street may not produce tomatoes all year round, but he is known by his reputation for producing tomatoes and is directly accountable for how they are produced.

The future of the global economy is not deteriorating, it is correcting for an error in placing too much trust on bigger entities to solve basic, local problems.  While the stock numbers remain high, and the markets boast that things are getting better, the numbers don’t lie: more and more people are spending conservatively and saving more.  Especially, in the United States, a new look is emerging for how consumers view their products locally versus internationally.  This is not a sign of a declining economy.  This is a sign of an enlightened one.