We’re all doomed! What 2016 means for the global economy

Its easy to be a naysayer. If you’re constantly predicting a dip in a system that is fundamentally peaks and troughs, you’ll always be able to say “I told you so” eventually .

That said, I’ve been worried about the anaemic recovery following 2008 for years now: our entire global economy is built on debt. We’re not just talking mountains here, its impossible to provide a sufficiently large metaphor without going galactic.

After debt triggered the last collapse, what was the solution? More debt. Tantalisingly low interest rates to encourage more borrowing. It sounds comical, but there weren’t many other options. We’ve just prolonged an unsustainable status quo.

Its a shame there isn’t more overlap between the fields of economics and psychology, because one day we’ll look back and scratch our heads at how so many people were oblivious to what was coming for so long.

2016 is going to be a interesting year. It has started very badly for pretty much every financial market, prompted by panic in China. Today, shares have dropped by 7% there and trading has been suspended. This is reminiscent of what happened in 2008 in the West.

The West is protected a little, a faltering China does not spell immediate catastrophe, but China is a growing market that the West has been growing increasingly reliant upon. Trouble there now will create trouble here further down the line.

I think 2016 will be a year of patches applied to keep a creaking system from another failure. Its not going to creep up on us seemingly from nowhere this time, there are still a few tools in the chest to keep the wolves from the door a little longer, negative interest rates could be fun.

It will be fascinating to see how it all plays out. No matter what you do, a market will always correct itself eventually, and we’re heading for an almighty crunch.

Its not all doom and gloom though. Like so many of the worlds problems, technology will be our saviour. As we automate more and more tasks, we should no longer need to worry about being productive enough to serve the needs of our population.

The problem lies in our financial system. It was built for a different era, when humans produced everything. As machines start to produce everything, we’re going to have to completely redesign the system. Next time the global economy tanks, we can start doing just that. Technology is already building the foundations for the next generation, Bitcoin for example is immune to many of the vulnerabilities of the current system.

In a world where technology can do most of the work for us, why would we keep insisting on working every waking hour when could be spending more time with our families and doing things we enjoy? That future is closer than we all think, it will happen in the lifetime of the majority of living people today. While its going to be a difficult transition, once we get over the hump we have a lot to be excited about.

John Hardy

John Hardy

Web Developer living in Bristol, UK.
I enjoy politics and technology and have been a fan of Bitcoin since 2011.
John Hardy
Share this:

Published by

John Hardy

Web Developer living in Bristol, UK.
I enjoy politics and technology and have been a fan of Bitcoin since 2011.