better world · Politics and Government · Real Life Economy

Are you ready for the next European economical crisis?

In the last decades, economical crisis’s has become part of our reality. Somehow, we are always surprise when it hit us. It is quite a remarkable fact, as we are allocating millions of dollars yearly to prevent and predict those events. In our current system, we have central bank, state institutions, economics and governments that are all supposedly in charge of making sure it will not happened. Nevertheless, it start to look like the next economical crisis is inevitable.

In the way I see it, those economical crisis should be categories as natural disasters. They happened fast, affecting the majority of the low and middle class drastically,  destroying the life of endless citizen and normally takes years of recover (if ever possible). My theory in the subject is that the big institutions, our governments and the rich are well aware of it way before it comes. Moreover, this layer of our society have the confidence that whatever come, they will be safe or saved. After all, bank and cooperation’s are saved by the government. In the worst case scenario, a specific company will bankrupt leaving  the rich with their riches, ready to move to their next investment. (just look at our recent history for countless real life proves).

It is unnecessary to mention, that the cost of saving this cooperation’s, banks and riches is payed years ahead by the low and middle class, in form of taxes under the justification of national debts or recession. It is a paradox, the people that get hit the harder by mistakes that are not theirs, are the one to pay for its consequences. The middles class lose their jobs, their saving disappear, their money devaluate itself together with their security, confidence and comfort. In this cases, the low class just becomes poorer which promise they will stay that way. 

the next European economical crisis

Now lets be smarter than we’ve been previously. We can learn from the past and prepare ourselves for the future. Does the next economical crisis is around the corner? The answer is yes and it is closer that you may think. In wonderful book called “Manias, Panics and Crashes” by Robert Z. Aliber and Charles P Kindleberger (Click for book review), a theory in the subject is presented. The book is showing that economical crisis’s never stop, they just move around the globe. We are unaware of it, as it will create panic. Which is exactly the same reason we are not aware of the crisis that is coming to hit us now. In the book, a few clear criteria are presented which appear before any economical crisis. I will lay them down and show the current European condition.

  1. An unreasonable increase in house prices is created – Based on publications, Eurozone house prices rise at the fastest rate in 11 years. House prices in the first quarter of 2018 were 4.5% higher than in the same quarter a year earlier. (Slovenia led the way with a 13.4% rise). Click her for the full article  
  2. An euphoria is created in the market between investors that shift to investments to the local market– recent publications had been showing that investors around the world are optimistic about the European market, ignoring the fact that the ECB  just slashed the European growth forecast.  Click here for article – Optimism article 1, 2, 3.
  3. A catalyst need to appear to create the burst of the crisis – There is many things that can evolve to be the catalyst that will launch the crisis. The Italian new government, the Bretix, trump new import/export reform (the “Trade war”) or just one the local big banks that can just collapse are all part of a long list. Just google the next European economical crisis and find endless article in the subject.

The bottom line is clear, the next economical crisis is around the corner. This time, Europe is even less prepare to handle with it than the last time, as it did not manage to recover yet. Moreover, the political fragility at the moment is not a good and comforting sign for the future in case I’m right. What can we do about? Well, at the moment not a lot. From the other side, when it comes we can demand that the solutions that will be implemented will demand the rich, bank and cooperation’s to take responsibility, for the sake of creating a better future for the middle and low class. After all, it is their doing and it should be their responsibility.

Share you thought with me in the comment section and express your opinion. Awareness and open conversation are the key for the creation of a better future.

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better world · Real Life Economy

Conversation about Value – Did we lost our capacity to create value?

In a world in which money evolve to be our main mean of survival, a deep conversation about value is needed. As it separate the rich from the poor, the successful from their peers and affect directly the future possibilities of any individuals. Looking on any western society will bring any kid to the conclusion that our current society work an a strange set of principals when it comes to valuation. One of the main reason for that is that the current concept of value and its measurement is in the realm of the abstraction, detached from its original concept. I believe that the majority of the people cannot explain to a 10 years old kid, why an Iphone cost more than a monthly rent, why a shirt can cost more than a meal and why hard work do not give you enough money to live well. unfortunately, there is some good reasons for that.

It is visible that in a world in which money dominate our existence, the fact that it is by itself and abstract tool has created a complicated mechanism that can be misunderstood. After all, if the purpose of money is to give value to real objects while by itself it is no longer exist in a materialistic form, a practical gap can be created separating the  tool of valuation from its original purpose. Moreover, if our abstract money give value to solid objects (as food, housing, cloths etc), while the same money give value to abstract concept (As time, intellectual properties, future value etc), it is normal that a confusion and lack of clarity will be created.

Conversation about value

As we are living from one economical crisis to another, while our currency lose its value on a yearly basis. The capacity of an individual to maintain a reasonable life by working becomes harder each year. This is something that we all feel and we are all well aware of. This evolution of money affect many aspect of our lives. Many people do not make children’s as they do not manage to maintain themselves economically, the capacity of a person to socialize diminish as he/she are missing the free time and The capacity of people to take an active part in their politics diminishes as they lack the time and peacefulness to understand it. Money which used to be a form a reward and tool to give real value to work and capacity, became the main obstacle for a decent life for the majority of the people on earth.

While it is true that one of the main reasons for the lack of money in our current society is partly due to the way our current socio economic system is build (For more information about this subject Click here), I truly believe that the fundamental problem of our current situation is coming from our lack of capacity to understand the ideas and reasons behind value. Due to that, I’m certain that if we are searching to understand better our economy and aiming to create a better future, a deep conversation about value is required.

It is value, that determine our wage, the cost of commodities around us and the services we use. As money become abstract and nations have debts measured in Billions and Trillions, it is not surprising that we lost the capacity to understand what value is all about. This is a mental stage that make us weak in front of our employers, governments and cooperation’s. By understanding why something worth this price we will be able to see if it is to expensive. and only after we can evaluate the prices of our commodities we will be able to evaluate our time, which is our salaries. It is not an easy subject, but it is not complicated one. In my next posts, I will go deeper into this subject. Hopefully, it will give to some of us some clarity and will help us create a better society.

Share you thought with me in the comment section and express your opinion. Awareness and open conversation are the key for the creation of a better future.

If you like this content and would like to get more, Please like this post subscribe to this blog or to my Facebook. Your support is giving me motivation and helps me cause. For more topics in this blog click here.