Mirage - The Illusion of Global Economics

August 2017 ยท 3 minute read

A number of months ago, Miguel Franco, mayor of the Mexican city of Tepatitlan (about 60 miles NE from Guadalajara) gave, with the common candour & honesty of those lands, his diagnosis about the fiscal crisis. More or less, he said the there is no this kind of crisis, because more cash is being produced from company each day “right now there´s cash & the working day right after the guys from the inventory marketplace say that is long gone, who ate it? The money is nonetheless there and they are not likely to cheat us”.
This instead curious assertion brought on him (as you could expect) a storm of jokes and critics, but, real truth be stated, despite his obvious simple-minded reasoning, this Mexican Mayor has rubbed the salt in the wound of 1 of the facets to consider into account in gentle of the existing economic turbulence.

It’s correct. Each day much more money is becoming “produced”, there are a lot more products & more financial activity. Dining Rancho Mirage , abruptly, a team of investors say that the shares bought on the marketplace no lengthier have the value they used to, and, as clear consequence, the whole globe faces the risk of a economic downturn.

The true query here is: what the hell happened, for instance, with Citigroup? Almost two several years back, this economic company experienced a stock value of 277,000 million pounds, on the other hand, this final 7 days its price had plummeted to merely 6,000 million. This indicates that 271,000 hundreds of thousands vanished on slim air, but why?

The painful answer is that Citigroup by no means truly experienced a value of 277 thousand million pounds. This variety wasn’t backed by concrete reality, but by the intended revenue foretold by the “fiscal analysts” (a combination amongst sorcerers and businessmen). So, when their “cotton candy” castle arrived trembling down, the buyers loudly crashed their heads in the difficult, unmerciful real entire world.

The crash in the price tag of the stocks of Citi & a bunch of other companies who have misplaced as much as ninety% of their worth, constitutes an indeniable evidence that our present financial program is standing in bare air, holding from illusions, cheats and hopes, which turns into truly hazardous in generalized fear moments, as these we live in.

They are going to never confess it, but not even the economists experienced a full concept about how deep is the disaster which have been its leads to and how a lot it will consider us to get out of it. Concealed driving their baroque math & unintelligible ideas, they’re just as perplexed as we are.

We require to recognize, after and for all, that the economy is not, and can in no way be an exact science. The financial technique is more like an enraged horse with meth habit. We can try out to tame it, but we’ll never completely be successful.

Here is just 1 illustration. The Funds Trade market by itself moves more than $one,350 TRILLION bucks every calendar year (3.seven trillion every working day). That’s just as well considerably cash to track and see if the counts match.

We live in the middle of an financial system relocating at the pace of light-weight and the only factors we can do is utilizing our typical feeling and hope that the waters return to their level, since, at the conclude of the working day, the tempting stock exchanges & world economic climate are just illusions, just a Mirage.