Headline September 02, 2016/ ''' DESTROYING ALL FUTURES : * CHEAP MONEY * '''

''' DESTROYING ALL FUTURES : 

* CHEAP MONEY * '''

*WHERE ARE THE NATIONAL BALANCE SHEETS?*  I keep asking. In the context of Pakistan, no one student, could put me wiser.

There has been a proliferation of stories the world over, and the world keeps getting excited about debt, burdens and spreads.

BUT the specialist truth is that for every  financial liability  there has to be a financial asset. The world over, there's still a good deal of handwringing in many, many quarters about excessive borrowings of the state.

LOANS, LOANS, loans, but who will pay these loans when they come due? The answer is obvious: lenders will pay each other by providing yet more loans, the proceeds of which will be used to pay the maturing loans.

*Debt, can thus be rolled over and never repaid*, but until when. Both lenders and borrowers are aware of this fact. 

The interesting game can go on, and loans accumulate, until it reaches the point where lenders are not willing to go on with the game anymore. This is when the bubble will  burst and a crisis will erupt.   

IN ENGLAND  -The government is about to sign for a new $1.9 billion loans from the World Bank, in accordance with the recent commitments issued by the Donor Conference held in London.

Jordan is also about to borrow  $700 to $900   million from the International Monetary Fund  [IMF]  under the recently agreed three-year economic reform programme and is applying for a $300 million loan from Japan   

So, in very general terms, is  *cheap money* destroying all our futures and even killing all variations of capitalism?

Clever risk takers can still make a killing on the stock market, but bank and saving accounts are now useless as are all forms of safe investments-

Including the gilts that older investors and pension funds are advised to stock up on. When the music eventually stops and our great house price boom peters out-

Britain's wealth owning majority will suddenly realise how fiendishly hard it has  *to make money from money*

Panic and anger will set in, and there is nothing scarier than the middle classes on the warpath.

In the past, there were three ways to ruin those whom Marxists would disparagingly describe as petit bourgeois savers,  in all cases, the outcome was chaos and social dislocation. 

One was hyperinflation  -as in Latin American banana republics.

Another was expropriation through downright theft or oppressive taxation of wealth, interest and inheritance. The third was mass retail banking bankruptcies, as after the 1929 crash, a horror we only just avoided 2008-9.   

We can now add a fourth threat: permanently negative interest rates that make it make it much harder to preserve,  let alone to grow, capital, and which put home-ownership and retirement beyond the reach of all but the wealthiest.

*The fallout won't be as dramatic; there won't be a revolution, merely a gradual and dangerous rise in resentment*.

The Honour and Serving of the latest cutting edge  *Operational Research* on  ''Economics and Economies''  continues. Thank Ya all for reading and sharing forward.

With respectful dedication to All The Governors of the Central Banks, CEO of Banks and Financial Institutions. See Ya all, Sirs, on !WOW!  -the World Students Society and !E-WOW!  -the Ecosystem 2011:

''' Paths To Future '''

Good Night and God Bless

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