Return to recession
Says Jim Rogers, the pioneer of hedge funds and a renowned currency trader, “Since the beginning of time there has been a recession every four-to-six years and that means another one is due around 2012. The world is going to be in worse shape because the world has shot all its bullets.” Saying this, Rogers also referred to Ben Bernanke, Chairman of the US Federal Reserve, “Is Mr. Bernanke going to print more money than he already has? No, the world would run out of trees.”
This grave picture sketched by Rogers is further strengthened by IMF’S warning stating that the global economy is at risk of slipping back into a recession if the US does not take significant steps to bolster its weak recovery and Europe does not take strong action to prop up its failing banks and sovereign debt problems within each country.
The warning came as the IMF got startled over the downgrading of credit rating in Italy and France, the pulling out of millions of dollars from the banks over worries that they would collapse due to their high exposure to Greek debt which is itself undergoing another round of deep austerity cuts in order to get access to another $11 billion of the $110 billion in emergency funds set aside by the European Central Bank, and the efforts of fellow European monetary partners to keep Greece from defaulting. In addition to the concerns of Japan’s public debt, IMF also fears that another recession would take back the industrialized countries into recession.
There are many analysts who view the current pain before the economy finally rebounds as short lived and expect people flushing with cash and paying down their long term debt. However, a popular majority discards this optimism, as they blame the global business community to take ill advantages of the radical economic changes by keeping wealth in their hands and dominating global economic policies in their best interests. It is held unfortunate that the leap in technology, telecommunications and the knowledge economy have not been utilized to improve the living conditions or narrowing the socio-economic gap between classes and expand the middle class. Thus, the new capitalism has gained a universal status by not only exploiting global resources but also the savings of workers in economically developed and developing countries.
It is due to the advancement of technology that has enabled speedy online transactions for the new capitalist system to connect global markets and put them under its full control. Thus, the capitalism affects large social categories surmounting border and across continents.
Now these large groups of people from across the world have come to the realization that financial capital, heads of banks and international investment institutions, and speculators in Western countries, have joined to push them into poverty and confiscate their savings. This has resulted in the unification of the demands of protesters in the capitals and cities of European, African and Asian countries. Their demands focused on the need to stop capitalist greed and financial corruption and provide jobs and social services.
This is evident by tens of thousands of people from across the United States and around the world who are supporting the Occupy Wall Street movement. Over hundreds and thousands have gathered in cities and towns to protest unprecedented consolidation of wealth and power, plummeting household income, skyrocketing school debt, and a broken political system. A number of people have made their presence through sending their personal notes of solidarity and support.
But experts say that there is no argument on the message of the protest, but the location of the pulpit being Wall Street is futile as the selfproclaimed ‘99 percent’ masses will be unable to shift the thinking of uneager one percent elite. They suggest that rather the majority of young student protesters should stage sit-ins outside the business schools so that the future bankers, traders and political lobbyists can be targeted.
Thus, it is not certain whether the next global recession can be avoided, but there is a clear need to rethink business by providing new training to future business leaders to view their roles, analyze risks and understand the moral implications of strategic decisions