Today I plagiarise from Bill Blain’s blog which points succinctly to great concern. Read on :
‘ UK rents are rising at 9% per annum. The average monthly rent in London is now £2035. The average London Salary (Statista) is £44,370, or £2,880 per month after tax. Go figure.
Something is darkly wrong with the western economies. Over the last 15 years we’ve seen progressive unbalancing in the relationship between workers, capital and owners. The shared economic benefits of stronger, wealthier nations no longer accrue equally across the economy. Workers are relatively poorer and under greater pressure today than at point since the post-war economic boom that gave my generation our label – Boomers. My kids are millennials and Gen-Z – their expectations and hopes are tragically different to what I embraced 40 years ago.
The problem is equality.
Over the last 15 years of ultra-low-interest rates and QE, the owners of capital have become richer, while the earnings have of workers stalled. That reality has not yet sunk into markets. Low interest rates did not fuel the building of new economically productive plant that would have fuelled the productivity gains necessary to raise worker wages. Productivity has stalled across the west – yet the owners of capital have seen their wealth explode.
Instead, what QE did was fuel massive and highly speculative inflation across financial assets – stocks, shares and bonds – which accrued directly to the owners of capital, the tiny 1% at the very apex of society. They didn’t borrow money so their firm could build new factories to pay their employees more – they raised debt to fund stock-buybacks pushing up their wealth while wages flatlined.
The compact between workers and owners that enabled the success of market capitalism is breaking down. The cadres intent on undermining democracy and capitalism in Moscow and Beijing will be absolutely delighted.. Capitalism is eating itself.. exactly as Karl Marx predicted.
The inequality between workers and capital is metastasizing into a massive economic crisis – and we appear to be walking into it blind.
The first part of the crisis is that workers no longer figure in the calculus of business.’
And I say.
It’s not working out and the wagons are circling. As the Fed expect interest rates to fall we are effectively worsening the situation not relieving anything. The UK stock market is readying to rise but its rise and fall in interest rates is not on the face of it good news. Karl presently resident in Highgate Cemetery got something right it seems.
qbitblogger 