Scenario 1
As a non-economist, reading economists can be an entertaining business. Chris Dillow, for example, explains human relationships in terms of economics and sees co-habiting as a call option, irrespective of its moral standing.
The Financial Times, one of my favourite sources of often fictional entertainment, has conflicting points of view. Firstly, that credit squeeze and our darling Chancellor of the Exchequer:
Britain’s economy will be hit by the global credit squeeze, forcing the government to downgrade its growth forecasts ahead of a possible general election, the chancellor of the exchequer admitted on Thursday.
The media is being partly blamed for this:
For the allegation that is now being bandied about is that irresponsible media coverage played a role in turning this summer’s credit turmoil into a crisis.
On the other hand, other FT columnists seem to be talking up the economy:
Most emerging economies, on the back of buoyant global demand and high commodity prices, have expanded rapidly and are less vulnerable to external shocks. Robust earnings growth and reduced country risk have propelled stock markets higher and bond yields lower.
Scenario 2
We have a liquidity problem in our banks over here which is only just emerging. This has not yet affected the average customer, except in the refusal of loans. However, on the strength of the words "possible crisis", retailers who've been itching to raise prices have suddenly done so. And how!
Milk is 40% more today than last Friday. My computer I'm in the process of buying [things take ages in Russia], has suddenly jumped 81% in cost, irrespective of the fact that I've already paid. All goods have alarmingly surged in price.
There is absolutely no direct economic connection between the bank problems and the price hikes except the age old justification of greed and I ran this by a Financial Services client yesterday who was mystified and yet not mystified.
Conclusion
In my jaundiced opinion, the doom and gloom talk from the Treasury disguises something disquietening. There may be no economic justification for a global squeeze [see the last quote above] but the CBs and Treasuries are sure trying to talk us into one.
In other words, they know very well what's going down. Couple that with accompanying moves in the field of surveillance legislation et al, the Regulation of Investigatory Powers Act and its corollary discussed here in Phil A's post plus the move to regional assemblies - and it's looking increasingly like a gang of criminals up there in charge of us all.
Actually, without putting a label on it, it's an agenda. Deliberate mismanagement by the CBs, particularly the Fed, allowing unbridled speculative trading, bubble bursting, credit squeeze in economies hocked up to the eyeballs, bank liquidity crises, baling out and debt creation of the domestic banks by the CBs, runs on the banks, calling in of credit debts, bank closures, massive unemployment, selective terrorist attacks preceding newly prepared legislation, strong man arising to sort out the mess, [Stalin, Roosevelt, Churchill], inevitable war, suspension of the party system in favour of a combined government, evaporation of the bourgeoisie.
Call me a kook now in 2007. We'll see how wrong this scenario is in the next few years. If it does pan out this way, I assure you there'll be zero pleasure derived from it.
11:15 My crazed reader origin stats [crazed stats, not readers] - this will reverse [usually] by midnight with the Brits taking top spot but other countries [usually] stay much the same.
