The Middle Class of the U.S. and Europe are watching as their economies fall around them. Their banks are being destroyed as governments take over the helms and inject printed money into the bank vaults. The U.S., the U.K., Ireland and other countries are “nationalizing” their major banks in an effort to re-start their economies by making credit available to their populations. The quantities of newly printed money being used are at levels never seen before in the history of
the West. Because of these enormous quantities of money the governments involved are demanding control of the banks. Instead of private control of banks we will now see political control of banks. Historically, political control means corruption!
As this process progresses the Middle Class of the West is becoming apprehensive about their future. Will their life style change? Will people used to big homes, big cars and big dinners suddenly be confronted with what they used to know as “Poverty?”
Yes, they will.
There is a fundamental change in the Global Economy. Manufacturing and agriculture, the two fundamental pillars of an economy, have been transported over the last thirty years to Asia, Latin America and Africa. It is clear that the manufacturing is located mostly in Asia while agriculture is located mainly in Latin America. What is also clear is that the U.S. and Europe have been turned into consuming economies and that their vast accumulations of capital are being funneled to the East. Western economies have also been turned into some strange form of economy that never existed in the past: the “Service Economy.”
What is a “Service Economy?”
A “Service Economy” is an economy where the great majority of workers and administrators do not produce any goods. The workers and their administrators provide “services” to people who cannot or do not want to perform tasks.
Preparing food is one of the most common tasks found in the service economy. Today, there are chains of restaurants throughout the western world. McDonald’s is everywhere. A McDonald’s restaurant can be found in the most traditional and respected avenues of all of Europe and the U.S. Where only the most famous shops could open a store front in the past we now find a flashy, plastic McDonald’s store. No famous city is immune. It is obvious that the MacDonald Corporation has learned how to successfully bribe the politicians of any city in the world. It is also obvious that food preparation is more important to modern society than art or crafts. The McDonald’s restaurant is emblematic of the Service Economy.
The present Middle Class in the West is a product f the Service Economy. In Asia, the Middle
Class is a product of a manufacturing society. The Western Middle Class rests on capital which is going rapidly to the East. In Asia the Middle Class rests on that same capital arriving from the West.
Western governments are not interested in changing this scenario. The politicians who run the governments get their power from the Money Managers who get their profits from Asia. The flow of capital from West to East will continue until the profit declines. At that point, the Middle Class in the West will have disappeared. Knowing this, Money Managers are investing in Asian companies. One can hear daily commentaries by the best financial analysts advising investors to invest in Asia and to ignore the West.
It is, in a sense, disheartening that the Western Middle Class is disappearing, but the evolution of economies knows no emotions.