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Last days of the sinking ship? When will the economic collapse occur and how will it affect our lives?

We used to think that after the economic crisis comes the recovery of the economy, so we need to adapt to the new conditions and wait. Each of us hopes that the crisis will not affect us or that we will be able to prepare for this situation, but this time everything will be different. 

No one can hide from the impending collapse, even in the most developed country, with enough money and a well-paid job. It does not matter whether you are the head of the company, the owner of the business, or you are a cool specialist, this crisis will not bypass anyone. 

In a market model of the economy, the quantity of goods and services must be balanced by the money supply. If there is more money and they are not provided with a mass of commodities, then they simply depreciate, which leads to an increase in prices for all goods and services. It is known that from the US Federal Reserve System from 2007 to 2010. printed and distributed $16.1 trillion in interest- free credit to the largest US banks (for comparison, the US GDP in 2010 was $14.58 trillion, and the total public debt was over $15 trillion ). 

During the pandemic, over $5.9 trillion was printed in the US and €2.5 trillion in Europe. These cash injections led to inflation, a decrease in the purchasing power of the population and a sharp rise in prices.

In an attempt to curb inflation, the national banks of countries raise interest rates. This means that the cost of all loans becomes more expensive for both businesses and consumers in every country. This situation is superimposed on the critical growth of world debt. In 2021, the world plunged into a debt crisis, and now in 2022 the global debt is $ 305 trillion (348% of global GDP). 

The external debts of developed countries account for two thirds of this debt. The main increase in debt occurred in the United States and China. In China, this provoked a mortgage crisis, which has shaken the country’s economy. 30% of mortgages are bad debts that will never be paid back. Chinese developers are destroying entire blocks of new buildings, because the cost of utilities for unsold apartments lies with the new builders, and this is very unprofitable.

The growth of debts and inflation has a very strong impact on the economies of countries. Due to rising interest rates, countries have to pay more on government loans. This means that our taxes, that is, our money will go not to improve our lives, social benefits, medicine, education, but to the International Monetary Fund, the World Bank and other financial organizations from which our country took loans.

The economic crisis continues to intensify due to the geopolitics that have provoked the energy crisis around the world. The world economy is in a precipitous decline. The economic crisis in 2022 led to stagflation, and this will only worsen further, that is, against the backdrop of rapid inflation, prices for goods and products will continue to grow significantly, production will fall, it will be extremely difficult to find work, and wages will decrease, a shortage will begin many goods and products, and some of them will disappear completely. This will lead to starvation, power outages and fuel shortages. 

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Poverty is the norm in our world today. According to the World Bank, almost half of the world’s population (46%) lives on less than $5.5 a day – that’s $165 a month. For this amount, people must provide themselves not only with food, but also pay for utilities, rent, buy essentials and medicines.

Population poverty rate by country for 1998-2018 
The more people with less than $5.5 a day, the darker the color.

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But even if we take the most developed countries, there will also be a huge number of poor people. In the USA – 50 million (16.6% of the total population) live below the poverty line, in the UK – 14.5 million (21.6%), in Germany – 13.8 million (16.48%), in Japan – 20 million (16%). 

Despite the fact that these countries have the most developed economies, child poverty is rampant in them. Accordingly, if a child was born in a poor family, then he does not have the opportunity to get a good education, quality medicine or housing.

Developed countries by child poverty rate.

The paradox of the consumer format is that in such a society there is a huge amount of resources and money, but they are not available to the majority of the population. 70% of the population lives in poverty, while 1% of the population owns more capital than all other people on the planet, and even during a crisis, their capital continues to grow. So the rich get richer, the poor get poorer.

The essence of the consumer system itself is that some get richer at the expense of the impoverishment of others, that is, there must always be owners and those who work for these owners. Such an economy does not work differently – in fact, this is the same slave-owning format that we thought we got rid of. The economic system itself is designed in such a way that it itself generates crises, driving some people into debt pits, while exalting others above everyone else. At the same time, there is a huge amount of resources and money, but they belong to this 1% of the richest people on Earth.

Currently, governments are still covering the costs of rebuilding the devastation from earth change disasters, including through large long-term loans, but there will come a point when our financial system will no longer be able to provide for the colossal destruction that will occur in the future.

On the graph, we see predictive estimates of an increase in the number of earthquakes in the coming years. Therefore, due to the increase in climate disasters, the collapse of the global economy is predicted already in 2030.

Thus, global GDP will not soon be able to cover all the losses. In fact, we could have 6-7 years, and then these processes will only get worse, and we will not be able to find a solution in the modern model of the economy. It’s like patching holes in a sinking ship. 

In our opinion, the consumer format of the society in which we live has exhausted itself long ago. The model of the economic system that operates now is detrimental to the survival of all mankind. 

At the moment, people’s self-consciousness is not yet ready for equality. And if an unconditional income is introduced, then there will definitely be a lot of individuals who want and will try to get more, including through deception and exploitation of other people. Such is the nature of man!

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