THE CRISIS engulfing world capitalism is causing panic amongst the leading global capitalist financial experts which is finding expression on the pages of the bourgeois press.
An article in the weekend’s Guardian newspaper posed the question point blank: ‘Are global stock markets heading for a crash?’
This article, by Richard Partington and Graeme Wearden, started by noting that the mood of optimism that prevailed in the world’s financial capitals during the summer was mainly ‘powered by the AI (artificial intelligence) revolution’ which drove the US stock market to all-time highs.
Investors and hedge funds poured billion into the stocks of the ‘magnificent seven’ giant AI companies believing the hype that this ‘boom’ in stock market prices made issues like the spiralling cost of oil resulting from the US-Israeli war on Iran an irrelevance.
Now, the article explains, these same investors are scared that ‘the main hope of economic redemption – AI – could also turn out to be a dud, amid fears it has fuelled an almighty bubble in the US stock market’.
The AI ‘revolution’ which has eaten up tens of trillions of dollars has not produced the profit promised by tech companies.
Instead, it has created a multi-trillion dollar bubble that is set to burst, bringing down the stock markets in the US and across the world. Adding to the capitalist financial crisis, is the failure of US imperialism to defeat Iran in the unprovoked war that it launched along with Israel on 28th February.
The closure of the Strait of Hormuz and the failure of the US to secure its opening through military means has driven the oil price to over $100 a barrel.
The giant investment bank JP Morgan has issued a rare note to its investors, saying it is struggling to predict how oil prices will be impacted by the war and that ‘we simply don’t know how to model the end game’.
The bank said it had assumed at the start of the war that there would be an ‘economic red line’ that the Trump administration would be unwilling to cross and it had believed Trump would have ‘struck a deal’ with Iran back in June to reopen the Strait of Hormuz.
Adding to the oil crisis, has been the seizure of the Bab al-Mandab Strait, another key international shipping route, from the Saudi Arabian backed forces by Yemen’s Houthi army along with the closure of a major Saudi oil pipeline.
The war, started by the US to carry out regime change in Iran and exert the domination of imperialism across the Middle East, has backfired spectacularly across the capitalist world.
Surging costs in energy bills and fuel prices have forced central banks in the US, Europe and Japan to increase interest rates.
In the UK, the Bank of England this week kept rates on hold but the financial markets are calling for four increases before the end of the year in an attempt to bring down inflation by making the cost of borrowing, and therefore the cost of living for workers, more expensive.
All the dire warnings from the bourgeois press point in only one direction – that capitalism is heading for a crash and recession that will be far worse than that following the Wall Street stock market crash in 1929. The crash in 1929 was swiftly followed by the Great Depression that swept the US, UK and Europe leading to the ‘Hungry 30s’.
The powerful working class will never accept being forced to pay for a capitalist system that has reached the end of the road and can only provide a future of wars and starvation.
The time has come for the working class to resolve this crisis by rising up and smashing capitalism.
This requires the building of a revolutionary leadership to organise the strength of the working class in mass strike action to bring down their capitalist governments and go forward to workers governments and socialism.
Build up the WRP and Young Socialists – build sections of the International Committee of the Fourth International to provide the leadership necessary for the victory of the world socialist revolution.
There is no time to lose.
