First week of June 2010 witnessed widespread panic in the financial markets of the USA, Europe and the world in general, there is great fear out there. The Euro zone is in debt, the USA is in even bigger debt, California is broke, giving out IOU's to the civil servants that some banks are now refusing to cash. But it is still not the end of the world.
People still need to eat, people must eat, food must be grown and sold, that alone is some assurances that the world economic system will not collapse though there might be significant structural changes. Food will sold, food must travel through the distribution network meaning some jobs in the large part are more or less guaranteed. We still need clothing, we might spend less on clothing, but humans for the large part are not going to be walking around naked. People are used to things and they will not get rid of those uses, women still need tampons, it has become a mental necessity, but it is not a necessity for survival, therefore women will continue to but tampons, tampon manufacturers will not lay every body off. People need to get to work, they need fuel, great public transport does not beat the luxury of one having their own transport, it is far from over.
However, in the next two decades there will be massive structural changes to the global economy that might keep real wages under pressure. Real wages will not see any significant changes in the West, they will be falling, however in places like India and China, millions of new consumers are being added, that is good for corporations and pension funds. Real wages might come under pressure, but pensions will survive. The Indian economy grew significantly, above 7%, new labor must be added to the Indian market, more people will want soap, toothpaste, shampoo, Johnson and Johnson probably a good company to look at. These people will want phones, internet access, better quality food, if there is free trade we will make it through these next two decades, and then we will gradually see real wages begin to rise all over the world, especially in the West. Gone are the days when a union member worked and wife stayed at home, real wages have at least fallen by a third in the west since the sixties, some economists think more, half.
It is frightening, but it is not the end of the world. If Africa comes aboard, real wages will rise faster all over the world sooner rather than later, but unfortunately nobody can see that, they see Africa as a threat, and blacks in general.
Even if the US dollar and Euro become useless, the worlds economy will move ahead, fiat money can be over printed, but with steady global leadership, we will continue to take on much needed trade, and this trade will grow. I am not worried about the future global economy, as long as there is some semblance to freedom, we will hobble along. Again growth will be faster if there was a free market, particularly in the financial sector. Humans can be strange, there is a crises, instead of taking the opportunity to deregulate more, there is screams for more regulations, this must be fought, fought at every inch, let people go now, the time for deregulation is now, stop creating a global police state.
Soon I will make some videos on knowledge and freedom, how use of knowledge is key to freedom, I am sure you will enjoy them, I promise they will be as neutral as possible.
Bhekuzulu Khumalo
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