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06 June 2012

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Ian Jenkins

The blog mischievously assumes that Scotland will need aid.

The way current economics are going the whole Western world will need aid in the next few years as the pendulum swings back and wealth returns to the once rich and powerful east. Some [much of the G20 and 'Wall Street'] say let it, and suffer the huge political unrest. Some say print more money [eg QE] and encourage inflation until the structural problem with the global economy is fixed. This is a well tested practice - didn't the Romans debase their coinage in a vain attempt to hold onto the empire? Certainly Germany tried this in the 1920's - and look where it led. [see http://www.scottisheconomywatch.com/brian-ashcrofts-scottish/2012/03/mr-salmonds-fiscal-plan.html "In a recent book, the Economist's Philip Coggan refers to the inflationary policies introduced by the government of Germany in the 1920's. . ."]

Others appeal for the short-term fix of a debt jubilee [write-off of unrepayable debt] - which has been calculated for the US and Europe at many trillions of dollars, pounds and euros.

Unfortunately there is little interest in restructuring the economic system to make it sustainable, with the international enforcement of new rules. This would require nations to cede some sovereignty - but Washington for starters is unlikely to OK this; although former chair of the US Federal Reserve, Paul Volcker, says "We are left with the certainty, however awkward, that active participation in an open world economy requires some surrender of economic sovereignty."

Politics loses.

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