Demand is the problem. International Central Banks lower interest rates to zero or below. They aim for two percent inflation so people will have the incentive to purchase soon before prices rise.
We live in an Economy that is based on Consumer Demand. China has benefited from this by taking built-in obsolescence to an extreme with quickly broken or unsuitable products. The Chinese Economy is now dependent on World Demand, and that is based on the need for ordinary people to want to consume. It is rubbish. Most people can live very cheaply if they are not pretentious and do not try and live like Middle Class copies of a largely mythical Upper Class.
This will not be the end of the Free-Enterprise Economic System, but an extension of it, in particular at a local, interpersonal level compared to the Institutional level of previous centuries. It will be more like Anarchy with micro-social-stability, energy-exchange systems, but it won’t be an Autocracy of a self-selected Elite, whether they follow the old, wrong Monetary policies, or they let interest rates escape from the burden of being classed as Usury, and hence inherently wrong.
Perhaps, a zero interest rate is indeed the correct standard, with positive and negative interest rates in different places that balance out. So this way, big institutions can be hit with low interest rates, while small investors and pension funds will benefit from high interest rates. It is possible to make all the goods and services that everyone in the world needs with only a small fraction of the population needing to do the work. However, we have developed the Social Prejudices that were inherent in the Working Class ethos of everyone earning their keep. Perhaps in the old days it was helping with the harvest or building something big. Everyone deserves a free, basic income. We can no longer rely on work as the measure of the distribution of income. Also, we must get away from the idea of a 'home' in order to end 'homelessness'.
If the world suddenly moves into such a phase, which could happen quite suddenly, like a giant quantum leap, what will happen to share-prices, particularly bank shares? They will drop to very little. Why do I still own Bank Shares? Indeed, why did I buy more from recent Property sales? I am my own worst enemy if I do not take my own advice and sell now at a small loss instead of hanging on and losing all.
We are about to see an end to ‘The Rule of Law’. It has failed. The Criminal Justice System has become degenerate. The Rule of Law exists for the purpose of delivering Justice, and was not intended as an end in itself. Finally it has become exposed through the Northern Territory’s inhumane concept of ‘punishment’ rather than rehabilitation or recognising Traditional Law. The Criminal Justice System has been a profitable growth-industry for too long benefiting a few handsomely at the expense of many.
Instead of everyone turning quickly into degenerate savages, life would go on much the same with local issues dealt with locally, but with a freedom from State issues, as the State would have shrunk, not in size but in density. After the official, central control of the Roman Empire, life went on just as it had for many hundreds of years, through what is sometimes called 'the dark ages', and in the same way our societies have been 'democratic' for long enough now to survive without the central control.
All this can happen very quickly. There is a branch of Mathematics called Catastrophe Theory that explains why there can be a sudden jump in Energy Level with no apparent in-between passage. Within the Atom it is called a Quantum Leap, but it also exists at many other Scales of magnitude including Social Systems that can appear to vary in small degrees round averages that have feed-back mechanisms and is stable over a lot of fluctuations. Very suddenly what was a large amount by usual standards becomes a small amount by a new standard that appears to be a complete break with the past. The Maths require the additional, Complex dimension measured by ' i ', the virtual unit that is the square root of negative unity.
Zero Interest rates would comply with Sharia where a net positive interest rate is forbidden. We are experiencing the consequences of these Economic Policies and more important the Legal Systems that accompany them, and most people are becoming less well off. The problem is Systemic and it would be wrong to apportion blame to individuals who are only living according the the way their Social System expects of them. That is zero on average, charging the wealthy and giving to the poor.
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