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Posted by Franco "Bifo" Berardi. over 4 years

2101 12333







Capitalism is dead, and we live inside a corpse.

Frantically we are searching a way out from the corpse, and not finding it.

Thirty years of neoliberal aggression are presenting the bill, and it’s going to be harsh.  Financial capitalism has systematically depredated society, and after the 2008 collapse social resources have been transferred to the bank system, while salaries went down. Not surprisingly the demand is free falling, and the economy is going towards a slump. Should we regret the extinguishing of the economic flame? Well, yes and not.

An alarming article by Clifford Krauss appeared in the New York Times on Jan 9th: Chinas Hunger for Commodities Wanes, and Pain Spreads Among Producers

“The flood of raw materials is pressuring prices, prompting a painful shakeout. Oil companies have laid off an estimated 250,000 workers worldwide….

Michael Levi, an energy expert at the Council on Foreign Relations, likened the reversal to a rainfall that first relieved a drought but then created a flood. “Producers ended up being their own worst enemies,” he said. “No one ever worried they would produce too much, but that is exactly what has happened and gotten them into this mess.”…

But economists worry that the commodity mess reflects a weakening global economy, lowering the value of trade worldwide and perhaps even pushing some countries into the same kind of deflationary spiral that has hampered the Japanese economy for decades. Global turmoil last summer, stemming from China, prompted the United States to delay raising interest rates until the end of last year.

“Lower oil prices have not proven to be as stimulative as economic theory once had it,” said Daniel Yergin, the energy historian and vice chairman of the IHS consultancy. “The question is what are weak commodity prices telling us: Is it overinvestment in the past, or signaling a weaker global economy forward? My own feeling is the answer is both.”Oil prices have declined by more than 60 percent over the last 18 months. Even corn, oat and wheat prices have sunk.”

A gigantic over-production crisis is looming, and it is going to add to the financial volatility. Central banks - as The Economist says (February 20 2016) - have run out of ammunition. According to Larry Summers a secular stagnation is here.