If there is a machine that does my job almost for free................
The fall of the Soviet Union and the rise of China added over one billion workers to the world’s labor forceToo much of everything?
The world produced too much stuff. There are 2 solutions, people & Governments borrow even more to increase demand or there is a recession, many factories close and supply goes down to meet demand. This only works if governments can sustained the people that lose their jobs in the recession.
Automation is a deflationary factor. You can listen to music and watch movies almost for free. That is deflationary.................... Technology makes life better for the consumer but horrible for the competitors. if there is a machine that does my job almost for free................
From the FT,
What does all this mean for the world’s policymakers gathered in Lima for the IMF and World Bank meetings? This is no time for complacency. The idea that slow growth is only a temporary consequence of the 2008 financial crisis is absurd. The latest data suggest growth is slowing in the US and it is already slow in Europe and Japan. A global economy near stall speed — and slowing — is one where the primary danger is recession.
http://www.ft.com/intl/cms/s/0/1e912316-6b88-11e5-8171-ba1968cf791a.html#axzz3oMeQwCg5
From the WSJ
The global economy is awash as never before in commodities like oil, cotton and iron ore, but also with capital and labor—a glut that presents several challenges as policy makers struggle to stoke demand.
“What we’re looking at is a low-growth, low-inflation, low-rate environment,” said Megan Greene, chief economist of John Hancock Asset Management, who added that the global economy could spend the next decade “working this off.”
The current state of plenty is confounding on many fronts. The surfeit of commodities depresses prices and stokes concerns of deflation. Global wealth—estimated by Credit Suisse at around $263 trillion, more than double the $117 trillion in 2000—represents a vast supply of savings and capital, helping to hold down interest rates, undermining the power of monetary policy. And the surplus of workers depresses wages.
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