Is the system ready to blow?

Amidst the summer period where holidays and relaxation are at the front of people’s minds, the global financial markets have decided to ignore this. The global stock markets are all posting serious falls, possibly tipped over by Morgan Stanley’s recent statement that the world is ‘perilously close to a recession’.

An article in today’s Guardian by Larry Elliot makes intelligent reading. Under the headline of ‘we’ve been warned: the system is ready to blow’, the article takes us through a potted history of the macro-changes in financial systems that have brought us to a hybrid system of pegged and free-floating currencies. This compromised financial system, combined with the excess of materialism and unfettered capitalism, is simply not working effectively. Or as he puts it, the “whole thing is an utter mess”.

The article goes on to link both financial and social instability having the same essential root causes and in effect, suggesting that a radical overhaul is required.

Serious stuff.

As a business, we help companies grow their business, profitably. Therefore one could argue we are a proponent in the capatalist machine, that being wealth creation. Of course is the answer. However, we are serious advocates that wealth creation should be put to good use, which should be re-investment for the greater good.

In this sense, Larry’s article contains some important truths. The challenge is evolving financial mechanisms and social systems to allow capitalism to succeed for the greater good, without throwing the baby out with the bathwater. With countries re-deploying capital into gold, it would be a difficult day having to un-pick the Euro and bartering with gold….

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