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Tuesday 19 December 2023

The Great Debt Write-Off [unpublished thoughts re-discovered Jan’23] – post RIP VW

Economies of the world in slow transition is the likely cause of the stagnation in economic activity, as reflected by traditional measures since the financial crash of 2007-08. The effectivness of the continuance of current monetary-stimulus policies have been considerably questioned. Is it merely blowing small capital-markets related bubbles at the cost of a monumental public debt-bomb? Some have argued Government debt financed spending caused a bubble in commodities and propped-up the unrealistic real estate/ property values. Others suggest public funds used for economic stability policies have artificially kept interest rates low, and prevented mass scale corporate insolvencies and debt default. In Great Britain yet another round of so-called “Quantitive Easing” was instigated by its Canadian central bank governor Mark Carney. This monetary re-assurance was allegedly to support the expected slump following Britain's public election to exit from the European Union in June 2016. FPM believe the economic-policy course needs to be re-directed towards real fiscal or Keynesian-driven expansion , rather than only capital market support. The real economy or at least the public sector spending has been squeezed ie in recession and austerity; while financial markets and real estate and other selected sectors of the economy (military spending) have been supported. Once the will is there the way to a “sustainable new paradaigm of economics” is possible. The drivers for the new paradigm of sustainable economics; certainly a shift away from the current neoliberal agenda are numerous: a) stagnant state of trade and commerce in traditional sectors (eg fossil fuel energy exploration and production) b) much needed overhaul in E.S.G principles (eg combatting systemic corporate corruption) c) excessive public private and corporate debt and eventual need for debt destruction “The illustrious manager of Pimco’s bonds funds, Mr William Gross, stated that on a long-term basis, governments are likely to use financial repression, where the rate of inflation is higher than bond yields, to erode the value of sovereign debt over time. The late great Barton Biggs also stated in Mid-2011 that debt devaluation is less painful than debt destruction as a long-term course.” d) public-policy led geopolitical agendas (eg competitive foreign exchange devaluations; nationalism spurning (NOT SPAWNING) globalisation – eg “Brexit”; ) e) climate change concerns changes everything (redundant assets ie los f) loss of trust in politics spawning alternative leadership & policy direction (eg Trump in US, Corbyn in UK; g) An Olympian ideal of greatness from Brazil Rio 2016 of national pride #ProudBrit via #Brexit… we were and are worldly without subscribing to clubs of nonsense! #BBCCoverage TaekwondoBritGirl

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