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Sunday, June 17, 2012

Recession or Dystopia

Dystopia: is the idea of a society in a repressive and controlled state - a police state with unlimited control over its citizens. Is this what is in store for the EU in years to come? Is it this form of control that is the goal of of the rich and elite. Control and repress the middle and lower classes so that they will always be under their thumbs. It is clearly heading that way.

Rising youth unemployment, a crisis of retirement among pensioners dependent on debt-burdened states and a yawning wealth gap have sown the “seeds of dystopia,” according to the report, based on a survey of 469 experts and industry leaders.For the first time in generations, people no longer believe their children will grow up to have a better standard of living.”It needs immediate political attention, otherwise the political rhetoric that responds to this social unease will involve nationalism, protectionism and rolling back the globalization process".

Income Inequality is a Theme that is getting played across the world in developing as well as developed nations.Most of the turmoil in 2011 in the Middle East and the Occupy Wall Street Movement can be attributed to the growing Income Gap between the Have and Have -Nots. The Middle Class is shrinking and growing poor by the day and it is not only the Poor Class that is getting affected.

High volatility in Commodities which was almost unseen 10 years ago has become the “new normal”.Its no longer strange to find Oil prices moving 5% on a daily basis.With these commodities being treated more like financial assets rather than critical inputs of daily living,expect more Hunger Riots in the Future.

30 Jun, 2011 China,Income disparity
China has increased the tax exemption limits for urban workers by 80% to $540 a month as soaring inflation and rising income inequalities has reached dangerous levels.Note increasing corruption and vast income inequalities have led to increasing incidences of violence and riots in the country.The prices of essential commodities like food and fuel have increased rapidly like in the rest of the developing world.Despite the central bank increasing interest rates,the prices have hardly moderated.Pork prices have touched new records making the life of the poorest quite unbearable.

India is facing the same problems where income inequality and growing corruption has made the population grow quite angry.$2 billion homes (Mukesh Ambani) being constructed in the same city housing the biggest slum in the world (Dharavi)is not helping matters.The ministers and big businessmen are being caught in huge scams which has incensed even the middle class population of the country leading to a successful agitation against corruption by civil society led by Anna Hazare.So far the Indian government has not done much failing much except for some social sector schemes unleashed during the last election.Rising fuel and food prices are increasing strains while shocking unemployment/underemployment among workers remains rampant.The poor class is facing the worst as most of their earnings go towards food and fuel whose prices have risen faster than their incomes.

Has anything changed with all of this inflicted "Austerity" No
Many are beginning to question whether anything has really changed at all; others maintain that things have simply got worse, that the old hegemony has been reinforced rather than loosened, widening the disparity between the wealthy and the rest.

Getting a mortgage has been put out of the reach of many people, savings are dwindling, high streets have become bleaker places and the expansion of public sector debt, partly to keep the world from plunging into a depression, means there will only be more painful austerity measures to come, affecting everything from arts funding to welfare.

There is a lot of criticism that the banks are not lending enough, but that is a by-product of banks being more careful about capital – there is more emphasis on getting the money back than on pumping up assets that can be seized if the loan goes bad. The path we are on seems to be set for five or maybe even 10 years. It is not dissimilar to the way it used to be. We'll just have to get used to it again."
Capital, though, is still broadly in the same hands: "You have the same people making the most money, doing broadly the same thing, but – we hope – more sensibly and prudently." It wouldn't have mattered if banks hadn't been gross risk-takers, this way of doing business would still have come to a shuddering halt. And no one has really addressed it. The world has fundamentally changed because we can't go on by saying: 'OK, China, lend us another trillion dollars so we can go on buying your stuff.' I am deeply pessimistic about our society. We have papered over the cracks but things will get worse."


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