Must the future of a country be qualified only by its public debt?

In truth, instinctively, we already know the answer to this question but THE point is that by measuring just how complex we can gain new insight and the potential to make economies more resilient.

Why is the economy is so complex? The reason is that there are a lot of factors involved, these factors cannot be easily measured as mathematical variables, if we measure some of them, there are a lot of links among the variables that we have chosen, there is not a perfect mathematical model of these relationships, and there is a lot of uncertainty about the way that rulers will make decisions in the future and the consequences that will produce these decisions.

via October 2012: Must the future of a country be qualified only by its public debt? « Guru’s Analysis.

UK Economy:: unfortunate coincidence or MORE symptoms…

…of the debt-fuelled “ME” culture and an even worse legacy for our children?

Our Governments have licenced the institutional rape of our planet and, not content with burdening the unborn with debt the youngest, weakest and most infirm in our society continue to pay so that morally bankrupt institutions can retain power and wealth. We are paying the heavy price of the excessive complexity they have created and those with the power to make change continue to ignore the lessons of the past. We are looking at social crises bringing about the collapse of complex societies: dystopia! Read more of this post

What is Debt? – An Interview with Economic Anthropologist David Graeber « naked capitalism

You may be interested in “eavesdropping” on a very interesting and informative conversation that, beautifully, illustrates how effective we are at ignoring history!

If you are really “hard core” you may want to check out “Mesopotamian complexity” in more detail here.

PP: Which do you see as playing a more important role in human history: money or debt?

DG: Well, it depends on your definitions. If you define money in the broadest sense, as any unit of account whereby you can say 10 of these are worth 7 of those, then you can’t have debt without money. Debt is just a promise that can be quantified by means of money (and therefore, becomes impersonal, and therefore, transferable.) But if you are asking which has been the more important form of money, credit or coin, then probably I would have to say credit.

PP: Let’s move on to some of the real world problems facing the world today. We know that in many Western countries over the past few years households have been running up enormous debts, from credit card debts to mortgages (the latter of which were one of the root causes of the recent financial crisis). Some economists are saying that economic growth since the Clinton era was essentially run on an unsustainable inflating of household debt. From an historical perspective what do you make of this phenomenon? Read more of this post

Banks do not focus on customers, says OFT chief – New Model Adviser®

Rather, the problem is that they view customers as a “means to an end” – a common complaint about firms across Financial Services!

The “shift”, that has taken place over many years, and accelerated courtesy of “light-touch Regulation”, saw the focus move from responsible lending to misrepresenting debt as credit and widespread mis-selling at every scale:

Earning loyalty and trust by serving customers with products that added value is a long, slow, process – stable and sustainable (win/win).

Chasing and retaining market share, based upon indebtedness and inertia is cheap and fast – fragile, volatile and unsustainable (lose/win).

Fingleton said that the financial crisis has worsened the situation and that concentration had increased across most banking markets.

‘At the heart of the concerns about these markets is a lack of ‘customer focus’ on the part of providers,’ he said. ‘We still have a banking sector where competition is manifestly not working well for consumers.’

He warned that ‘if we do not see real change from banks, then a more radical approach needs to be considered.’

via Banks do not focus on customers, says OFT chief – New Model Adviser®.

Creators and casualties of complexity: why banks are eurozone’s fault line [BBC]

The familiar expression that springs to mind is “what goes around comes around” or, in Biblical terms, perhaps befitting the scale of the problem…

“as you sow so shall ye reap”

However, please note the deliberate use of the term “casualties” rather than victims. Because, the ability to socialise the losses renders citizens as the VICTIMS!

Here’s the lethal chain of causality: banks have found it harder to borrow because of their big loans to the likes of the Italian, Spanish and Portuguese governments, and because of fears these governments will struggle to repay their debts; but if one or more of the banks were nationalised, the perceived liabilities of these governments would increase; and that in turn would erode confidence in the ability of other banks to repay what they owe; and so on, till no institution in the eurozone is seen to be sound. Read more of this post