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Broken economic system? #politics

broken economic system

It’s been another difficult week on the stock market, this time it was worries over a slowdown in China. China devalued its currency to boost exports. It’s in a powerful position and can manipulate foreign exchange markets.

We seem to get one crisis after another, since the financial crisis of 2007. That’s 8 years ago and it was mainly Lehman brothers that was the problem and the world economy still hasn’t recovered. Politicians in the UK blame the former prime minister and chancellor, that is simply not true. It is true they were a bit reckless with spending and didn’t understand the consequences. Trying to use tax credits to support low wages was a mistake. They should have raised the minimum wage and cut tax on low earners.

Now we have really tight monetary policy and austerity, but low interest rates are still driving up the housing market in London and the south east. We need to solve that problem quickly. While the people of the south east are enjoying artificially low interest rates, they can live beyond their means while others have no chance of affording a home.

The economic system in many ways is broken and no one is even trying to fix it. The problems in Greece, was the system, rather than the Greek people who have to suffer as a result of a broken system.

While the world economic system favours the rich and the big corporations, investing is very risky and smaller British companies will find it hard to raise investment. At the moment they can invest using cheap money from the banks, but for how long?

Small investors are at the mercy of greedy corporations and inept politicians. We just have to try to buy low and sell high. The small private investor has to be much smarter than those city traders.

There are signs today of some risk taking. I see lots of people buying Solo Oil, but generally the markets are down. The AIM market overall is 1% down and the FTSE 100 isn’t much better. Is it a good time to buy? There are bargains, but with a broken economic system who is brave enough to risk their money?

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