IT was reported yesterday that a survey of the top professional ‘money managers’ revealed that these investment experts believe that the world’s leading stock markets are overvalued and heading for a crash.
While some bourgeois economists have been voicing their worries for some time that the world stock markets, having reached record high levels, are now set for a crash of historic proportions, the fact that this crisis has finally penetrated the skulls of these investment managers is proof of just how close the system is to collapse.
These experts make their living out of directing trillions of dollars of investment money into stocks and shares across the globe and their jobs rely on convincing the financial institutions, the pension funds and the speculators that it is still profitable to invest in stocks and shares.
That they are now worried sick about a collapse in the international stock markets, speaks volumes for just how close the world capitalist financial system is to complete meltdown. A crash of this proportion will have a devastating effect on the lives of millions of young people and workers.
As history shows us, the US stock market collapse in 1929 led to the collapse of the banks and ushered in the great depression of the 1930s, with mass unemployment and starvation heaped upon the working class. But today’s crisis is much worse than that of the 1920s.
Today’s vastly inflated stock markets are occurring at a time when the economies of the capitalist world are in a state of permanent recession and slump – in other words there is absolutely no strength in capitalism to sustain this gigantic inflationary bubble. When it bursts it will take down the banks, the pension funds and what is left of industry, wiping out trillions of pounds at a stroke.
This ‘bubble’ in the stock markets is not the only one that is set to explode. Again this week, the Bank of England has warned about the massive rise in house prices being a ‘major threat to the economy’.
Such warnings, of increasing desperation, from the governor of the Bank have become a regular feature as the ruling class faces up to the prospect of an immediate crash.
What haunts the B of E is the collapse of the housing market in the US in 2008 (the sub-prime mortgage crisis) where banks and financiers lent huge sums to property buyers in a housing market that saw house prices reach epic highs.
When the inevitable crash in property prices plunged millions of families into negative equity and they found themselves unable to make their sky-high mortgage repayments, all of a sudden these mighty banks were exposed as having no assets and huge debts – debts that they insisted were taken on by the state through government bail-outs.
These debts in turn were transferred to the working class and middle class through the savage austerity measures imposed by capitalist governments across the world.
Today, the next crisis of capitalism is developing at a very rapid rate, with financial bubbles – driven by the US policy of printing vast sums of paper money through Quantitative Easing – leading to an inevitable crash that will dwarf that of 2008.
This will lead to a massive intensification of the class struggle as the capitalist class will try and survive by driving up its austerity measures to levels we have never seen before.
It will try and inflict mass unemployment and slave wages and conditions on the working class.
Workers will not sit back and passively accept pauperisation as the price for keeping this rotten, historically redundant capitalist system going.
The only way forward is for workers to put an end to bankrupt capitalism, take the power and advance society to a socialist system where production is for human need and not for the profit of bankers.