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Goldsmith Predicted Globalisation Would Wipe Out The Middle Class

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Nice video I came across on Zero Hedge, the first 14min are great:

http://video.google.com/videoplay?docid=5064665078176641728&ei=2s4yS-jdGoH0qwOtmujIDg&q=charlie+rose+interview+James+Goldsmith&hl=en&view=3&client=firefox-a#

An interview from 1994 in which James Goldsmith claimed that globalisation would wipe out the Western middle class through wage arbitrage with countries like China and India. Very interesting to hear arguments ringing so true 16 years later.

My personal view is that the wage arbitrage was more or less inevitable if market forces were pointed in that direction, but what should naturally have accompanied it was deflation of the cost of living (especially the price of land) in the West. Falling Western wages are much less of a problem if the Western cost of living is being allowed to fall too. Unfortunately Western central bankers prevented this by pumping trillions in credit into their economies, so workers were able to continue spending despite stagnant and falling real wages. Now the economy has hit the wall because the gap between wages and the cost of living in the West has grown too wide and the accumulated debt has become unpayable. What we need is deflation, and lots of it, ASAP.

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Nice video I came across on Zero Hedge, the first 14min are great:

http://video.google.com/videoplay?docid=5064665078176641728&ei=2s4yS-jdGoH0qwOtmujIDg&q=charlie+rose+interview+James+Goldsmith&hl=en&view=3&client=firefox-a#

An interview from 1994 in which James Goldsmith claimed that globalisation would wipe out the Western middle class through wage arbitrage with countries like China and India. Very interesting to hear arguments ringing so true 16 years later.

My personal view is that the wage arbitrage was more or less inevitable if market forces were pointed in that direction, but what should naturally have accompanied it was deflation of the cost of living (especially the price of land) in the West. Falling Western wages are much less of a problem if the Western cost of living is being allowed to fall too. Unfortunately Western central bankers prevented this by pumping trillions in credit into their economies, so workers were able to continue spending despite stagnant and falling real wages. Now the economy has hit the wall because the gap between wages and the cost of living in the West has grown too wide and the accumulated debt has become unpayable. What we need is deflation, and lots of it, ASAP.

Fascinating. He was right about so many things. Why can't Obama do everyone a favour and adopt protectionist measure as this guy has outlined? Probably too late. We is ******ed. I'm reading A brief history of Neoliberalism by David Harvey written in 2005. He also anticipated the financial crisis we are now dealing with.

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Fascinating. He was right about so many things. Why can't Obama do everyone a favour and adopt protectionist measure as this guy has outlined? Probably too late. We is ******ed. I'm reading A brief history of Neoliberalism by David Harvey written in 2005. He also anticipated the financial crisis we are now dealing with.

Protectionism will clearly come once it becomes politically impossible not to have it, the Americans have already started to some extent.

As Particle Man says , the normal flow is Boom / Globalisation / Unity - Bust - Protectionism - War

Edited by Tamara De Lempicka

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Nice video I came across on Zero Hedge, the first 14min are great:

http://video.google....ient=firefox-a#

An interview from 1994 in which James Goldsmith claimed that globalisation would wipe out the Western middle class through wage arbitrage with countries like China and India. Very interesting to hear arguments ringing so true 16 years later.

My personal view is that the wage arbitrage was more or less inevitable if market forces were pointed in that direction, but what should naturally have accompanied it was deflation of the cost of living (especially the price of land) in the West. Falling Western wages are much less of a problem if the Western cost of living is being allowed to fall too. Unfortunately Western central bankers prevented this by pumping trillions in credit into their economies, so workers were able to continue spending despite stagnant and falling real wages. Now the economy has hit the wall because the gap between wages and the cost of living in the West has grown too wide and the accumulated debt has become unpayable. What we need is deflation, and lots of it, ASAP.

There is a logical flaw in his argument.

If wage deflation continues to make western workers poorer and eastern workers remain poor (or refuse to consume) then where is the demand going to come from to buy the products now manufactured in the east? It's particularly bad in the UK - since we don't make much anymore our economy is based on selling this stuff to ourselves. If we don't sell, then we don't earn and we won't be able to buy anything, including land. This demand has been artificially stimulated in by credit but the party's over now.

The only way that sustainable demand can be generated is if wage earners, western and eastern become wealthier which requires that the CEOs like Goldsmith and their ilk give more of their profits to the workers.

This is a very unstable situation, let's see what happens but I am not optimistic - probably we'll get a war. :ph34r:

I can see some small wage increases occurring in the growing eastern economies but not here which means a sharp relative decline of standard of living for us and little or no growth in business for the forseeable future - a recipe for trouble.

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And 38 minutes in - "we're chasing an economic growth index".

Totally pointless - which is where Sarkozy was coming from when he asked Stiglitz to comeup with a measure for the quality of life which didn't include GDP.

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Bloody hell - listen to his answer to the question of how he sees the world economy today:

"Very fragile - you can see that in the volatility of currencies... incredible amount of danger in things like derivatives... we're moving to the outer limits of acceptable risk taking... World GNP is $30T... and derivatives outstanding every night is about the same... every night."

:o:o

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Got to be at least the third time of posting on here (as a starting post on a thread). None the worse for that. As a single polemic this has to be on of the most concise and accurate reflection of where the world finds itself today.

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There is a logical flaw in his argument.

If wage deflation continues to make western workers poorer and eastern workers remain poor (or refuse to consume) then where is the demand going to come from to buy the products now manufactured in the east? It's particularly bad in the UK - since we don't make much anymore our economy is based on selling this stuff to ourselves. If we don't sell, then we don't earn and we won't be able to buy anything, including land. This demand has been artificially stimulated in by credit but the party's over now.

The only way that sustainable demand can be generated is if wage earners, western and eastern become wealthier which requires that the CEOs like Goldsmith and their ilk give more of their profits to the workers.

This is a very unstable situation, let's see what happens but I am not optimistic - probably we'll get a war. :ph34r:

I can see some small wage increases occurring in the growing eastern economies but not here which means a sharp relative decline of standard of living for us and little or no growth in business for the forseeable future - a recipe for trouble.

I have to disagree, this is one of the best and probably the most articulate analysis I have ever seen posted on here.

Demand was generated through the supply of credit when workers no longer earned enough to purchase anything, that has just collapsed and it is pretty much what he predicted. Our economies are destroyed. Instead of a climb to the top we have had a collapse to the bottom but I doubt it will end in WWIII this time because nukes wipe out too much of the VIs investments.

If we imposed a global minimum wage however, things would be much better...

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"Very fragile - you can see that in the volatility of currencies... incredible amount of danger in things like derivatives... we're moving to the outer limits of acceptable risk taking... World GNP is $30T... and derivatives outstanding every night is about the same... every night."

This is amazingly prescient. What's even more incredible to me is the ideology of globalized free markets is still being pumped today as solution to all our ills- I guess too many people are now paid to too well to promote the economic party line for it to stop.

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Protectionism will clearly come once it becomes politically impossible not to have it, the Americans have already started to some extent.

Started?

They never stopped <_<

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Interesting that it's the Bourgeoisie that get wiped out, not the rich.

Whatever would happen if tariffs on Capital exports for individuals were introduced ? Thus Mr. Billionaire had to shoulder his reckless actions by his billions being wiped out along with everyone else. Nah, that would never be allowed. If such a rule was introduced all the high-flyers would leave the country and we'd all be much poorer.

Face facts, they'll leave anyway, the only difference with a constraint (or 100% tax on money taken out of the country) being that they won't be able to take their extracted wealth with them and may, quite possibly, invest in things which would generate real wealth for the country rather than just speculating on asset bubbles with money created out of thin air.

Yeah, yeah. I don't understand banking or how complicated it is. I do know that playing with paper money and claiming we're all richer because we double the amount every 10 years is not a way to become wealthier.

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Very good. I had no idea that he was so insightful. I remember him being portrayed as pretty much an outsider with eccentric ideas at the time. Not that I was thinking about this sort of thing so much then. I bought the line that he was just some rich ******* who'd retired and decided to interfere with us all. Now thinking that his son now has the ear of those in the highest corridors of power.

But would it be possible now to turn back the clock? What would such a scenario look like. Would it be protectionism, or is it something else?

I'm not sure its easy to put the genie back inside a bottle. Once you've scrambled the eggs it seems unlikely to me that you can unscramble them.

EDIT: I've ordered his book from Amazon.

Edited by TheBigNothing

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There is a logical flaw in his argument.

If wage deflation continues to make western workers poorer and eastern workers remain poor (or refuse to consume) then where is the demand going to come from to buy the products now manufactured in the east? It's particularly bad in the UK - since we don't make much anymore our economy is based on selling this stuff to ourselves. If we don't sell, then we don't earn and we won't be able to buy anything, including land. This demand has been artificially stimulated in by credit but the party's over now.

The only way that sustainable demand can be generated is if wage earners, western and eastern become wealthier which requires that the CEOs like Goldsmith and their ilk give more of their profits to the workers.

This is a very unstable situation, let's see what happens but I am not optimistic - probably we'll get a war. :ph34r:

I can see some small wage increases occurring in the growing eastern economies but not here which means a sharp relative decline of standard of living for us and little or no growth in business for the forseeable future - a recipe for trouble.

It will lead to global collapse. Eastern wages will not rise high enough nor quick enough, nor will western wages and living costs decrease enough at the right time for the transition to take place without significant shock.

I suspect we are just about that point today.

It may very well eventually lead to world war, but we will see significant civil unrest within countries first ... that, however, will come either before (when the writing is on the wall) or after the shock (when the dust has settled and people feel more secure that they can indeed have something to eat everyday).

My thinking is that the shock will wipe out absolute wealth on a grand scale, including the wealth of those very people who pushed for neo-liberalism and globalisation for their own profit gains. What concerns me about this scenario is to what extent the global economy is driven by elite consumption -- my feeling is that it could be a rather significant percentage, and while I do not believe in the wealth "trickle-down" theory in terms of elite to impoverished, I certainly think that there is a such a thing as wealth destruction "collapse-down" in the case of an imbalanced consumer pyramid.

So I suspect the rich will get hammered.

The other thing about the Goldsmith interview is that it confirms something I have known for a while: that the best indicators of economic and social situations do come through anecdotal means -- talking to people on the ground, people involved in real life situations -- rather than anything else. Official channels, either the media or academic, are constantly incorrect when it comes to non-scientific disciplines.

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Demand was generated through the supply of credit when workers no longer earned enough to purchase anything, that has just collapsed and it is pretty much what he predicted. Our economies are destroyed. Instead of a climb to the top we have had a collapse to the bottom but I doubt it will end in WWIII this time because nukes wipe out too much of the VIs investments.

You can even argue (and I believe) that spiralling house prices were a crucial component of the globalist model, because HPs provided security for new lending, while new lending drove HPs higher. Pernicious self-reinforcement of the inflating bubble, with MEW and other boom-froth being tapped to fund spending/consumption. Everything was sacrificed on the altar of globalisation and cheap consumer goods.

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But would it be possible now to turn back the clock? What would such a scenario look like. Would it be protectionism, or is it something else?

Globalism has created rival monsters capable of challenging the orginal Western monster in the global competition for diminishing resources (particularly energy), so protectionism won't do it any more. Too late to avoid a nasty and/or impoverished outcome now, I'm afraid.

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Protectionism will clearly come once it becomes politically impossible not to have it, the Americans have already started to some extent.

As Particle Man says , the normal flow is Boom / Globalisation / Unity - Bust - Protectionism - War

NWO will be upon us long before then, probably.

Ironically, its the communist mindset inherent in most of todays politicians (most of them were card carrying reds in their youths) and its obsession with one world government that is paving the way for truly global capitalism. When Brown Bailed out the Banks, he didnt nationalize the banks, he privatized the state.

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But it's not just the middle class.

It affects the bulk of the general population including a good amount of every section of the population except of course the likes of the bailed-out bankers.

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Bloody hell - listen to his answer to the question of how he sees the world economy today:

"Very fragile - you can see that in the volatility of currencies... incredible amount of danger in things like derivatives... we're moving to the outer limits of acceptable risk taking... World GNP is $30T... and derivatives outstanding every night is about the same... every night."

:o:o

So when they all said nobody could have seen the collapse coming.......................

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Although we can see it coming, we'll still bend over and take it like good little soldiers. We've been told to. Either that or a revamp of The French Revolution....

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But it's not just the middle class.

It affects the bulk of the general population including a good amount of every section of the population except of course the likes of the bailed-out bankers.

I think in America "middle class" refers to pretty much anybody who works for a living and pays their own way rather than relying on inheritance or benefits.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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