The Telegraph has a very interesting article out today.
Written by Allister Heath, it is titled ‘Cheap Money Is Destroying All Our Futures And Hurting Capitalism’.
The author’s argument is that the extremely low (often negative) interest rates predominating in the UK and across the West (especially Western Europe) at this time mean that returns on ‘normal’ investments are so low as to make wealth generation through compound interest practically impossible. He concludes that this is just as lethal to the middle class as hyperinflation, excessive taxation, or other drastically destructive occurrences that can arise in capitalist economies.
As he states in the article:
When the music eventually stops and our great house price boom peters out, Britain’s wealth-owning majority will suddenly realise how fiendishly hard it has become to make money from money. Panic and anger will set in, and there is nothing scarier than the middle classes on the warpath.
I might quibble with the author on a couple minor points. For instance, couldn’t the middle-class just spend some time educating themselves, and invest in real estate or small businesses instead of CD’s and Bonds? I realize it is more complicated then that, but let’s not take away agency from the discussion. Similarly, there are low interest rates for legitimate reasons, its not JUST a weird preference of central banks.
The latter argument goes to the heart of the lunacy of the article however.
HEAD IN THE SAND
It does not seem to occur to the author of the piece that the reason that the economies of the UK, and Western Europe in general, are abysmally bad is because they are dying societies. Their populations are only having half as many kids as needed to replace themselves. And they are only having 1/4th to 1/8th as many children as they were during the boom years of the 20th century which the author references.
Furthermore, is the inability of a thirty-something Brit to earn more than 2% returns on his or her money really their greatest danger? By the time they hit retirement Britain will be over 50% Muslim. As a result I fear they may have bigger things to worry about then the size of their retirement accounts. To get an idea of, one needs only look at the economies of other regions which contain similar percentages (35-75%) of Muslims. The residents of those countries- Albania, Bosnia, Chad, Chechnya, Lebanon, and Sudan, have suffered far more from violence than lack of compounding interest. For a prime example, click here.
Furthermore, for proof of the massive demographic change referenced, we have only to look at this same edition of the Telegraph, in which sits an article right next to Heath’s with the headline “Up to three in four babies born last year in parts of the UK had foreign mothers, official figures have disclosed”.
WAR IN EUROPE
As always, we can take hope in the fact that as things get worse, it makes open 4th Generation Warfare that much more likely, which is the only eventuality that could curb the nightmare Europe finds itself in.