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by pcstl
1938 days ago
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"Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short." I find it funny how first-worlders are horrified by the idea that they might have to live in mild discomfort. Maybe try looking at how most of the world that isn't the US and Western Europe lives before saying people's lives will be "nasty, brutish and short" because they won't be working some low-skill 9 to 5 for 40 to 50 years while making 6 figures and then retire with the rest of their lives pretty much planned out for them. |
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IMHO I think globalization is to blame for this; it has transferred equity/ownership from Western countries over time. It has given us cheaper electronics, cheap aviation/holidays, and other discretionaries but in return has denied people of the essentials (cheap houses, job security, etc) and has transferred existing wealth away. The rich have the means to protect themselves and even profit from this redistribution of wealth; it's the middle class instead where much of the wealth was has slowly been drained. Instead of wealth they now substituted it with debt to keep the system running.
In the country I live in house prices are highly proportional to debt growth, much accrued to foreign debt. Our exchange rate stays high since issuing debt in the local currency despite increasing the CAD and draining wealth bids up the currency on the FX market. As long as houses don't crash (which is where most debt is issued) the dollar's worth doesn't deteriorate and we don't see the drain of wealth. As long as debt growth keeps growing we always create positive pressure on our exchange rate. The sad part about this of course is while young people can't afford houses, the goods they may substitute for this (cars, holidays, gadgets) are all underpinned by the debt used to bid those houses higher via a higher than otherwise FX rate.