Stephen King -managing director of economics at HSBC- states:
"Everything else stems from this: shortages of credit, worries about
bankruptcy, monetary hoarding, and recessionary fears. We are
witnessing a catastrophic breakdown of trust within the financial
It helps to see the big-picture, regarding the "Breakdown of Trust":
it is true as King writes, that "The huge investments in paper assets
in recent years were ultimately used to fund investments in parts of
the economy which were never likely to boost long-term growth",
thus we must keep a keen eye on WHAT exactly we are doing with
all that money. This mean we must take a more critical fresh-look at
which sectors the economy is growing towards, as a social trend: for
ex. Medical Care.
We could argue that medicine is essential, yet unhindered "growth"
in the medical field does not translate into Productivity necessarily,
after all this increase is the result of 2 RECESSIVE FACTORS:
(1). An exploding health crisis in the population
(2). A higher cost of medical care.
The bottom-line fact is that since 1980 on, the world has been going
in a recessive-economy direction, focusing on "papers" of financial
gain (not Productivity itself) and on sectors such as Law (lawyers
and judges) & Law Enforcement (jails, security, police, etc.), with
an emphasis on Medical Care & Pharmaceutics, all of which are by
definition Non-Productive sectors, they require that some sort of
BREAKDOWN must occur for them to become "needed"; it could
be argued that financial papers of gain do not abide by such, yet as
we all know too well, it's not for nothing they have been labeled
"Weapons of Financial Destruction".
Then came 2003 and the push for Wars, another unwelcome guest
to the recessive-economy sector list. Thus the main cause of the
crisis, is that the economies have been shifted from Productivity to
high-yield profiteers of breakdowns of any kind.
There is top-money to be made in a phony "War on Drugs" that
merely increases the value of drugs themselves, a disfunctional
sector of society that contributes excessively to Crime, which
in turn calls for more police and judges/lawyers/jails/security;
top-money to be made in phony wars, top-money to be made in
the collapse of health in humans, etc etc etc. You get the idea.
Of all these, police are the least to worry about in economic terms,
they are what they are, and are not to blame on any of this, after
all police workers do not make any exorbitant wages, now do they?
Indeed perhaps the only sector within this group that does not
seem to massively profit of the increase in these sectors, are the
police workers who by and large are like any regular worker.
A productive society is one that invests in the sort of technologies
that change the world, not in supposedly "solving" breakdowns in
the human/social system; the war on drugs, or the wars abroad
not even solve anything at all, as they claim. The "drug" problem
is a result of Prohibition and of ignorant fundamentalist views,
who actually induce the problem, since the moment a truly serious
drug legalization properly administered and monitored is enacted,
the "drug" problem would vanish.
A sound medical system is one that interacts with the rest of the
energy/labour/transportation/manufacturing sectors, in order to
prevent a health crisis, not one who merely profits after-the-fact
on the health crisis. Therefore a real Public-Prevention medical
system is more productive, yet less profitable; if the political elite
has chosen to go for Profit instead of Productivity, then the current
crisis is but the predictable outcome of such disastrous decision.
The same logic can be applied to all things pertinent; we have been
ruled by an elite that does not do the job and does not seem to care
if they do it well, or do it at all. This is the problem behind the
current crisis, and this the essence of the Breakdown of Trust.
This is not a technical issue loaded with intricate jargon and hard
to figure out mechanisms; if the consider the Energy sector into
the same equation, we shall conclude exactly the same. While in
2000 it was feasible and time-was-up to invest in a sound change
of energy resources into sustainable/cleaner technologies while
there was an economic surplus and general trust in the system
to do such, the same elite chose not to, extending the same oil
paradigm which is nothing else than an accident waiting to happen
and plain bad news for the planet. The problem then, was not
'technical', it was a decisional disaster on the part of the elite.
What is happening is that the world cannot continue to function
consistently and sustainably, under the same elite; this is what
is truly happening, the bottom-line conundrum.
Other factions within the elite are merging up and coalescing,
while there are others who do not trust any faction whatsoever,
because things are more terminal on a day-to-day basis for them.
There is a general "Back To Basics" approach that is gaining
ground, and the only defining trend is how many people on any
level of the planet, are getting acquainted with such, as opposed
to the propaganda of "same old, same old" that the media keeps
spewing out in makeover schemes of the same paradigms.