our economy; greed, debt, inflation, deflation

That is the problem of today's society, and that is it is motivated to bring forward tomorrow's purchasing today. Everywhere we go we are enticed to buy tomorrow's goods. Go to Woolworths or Coles and they want you to buy 2 loafs of bread to save money. What does that do? - they bring forward tomorrow's buying today - that effectively shuts you out from going to their competitors for bread - very cunning and wrong. Harvey Norman? It wants you to buy that furniture and big screen TV that you would normally need to save for now - not tomorrow. By bringing in tomorrow's consumers it is gorging itself on the economy of the future. It guarantees its competitors will see less consumers as a result.

Unfortunately all this comes at a cost. There comes a point where tomorrow comes and there is nothing left that people need to buy - we have everything we need and can quite easily start saving at the expense of the economy. In the 70's and 80's lay-by was the way of buying something you never had the cash for. The economy was steady with very little frenzy activities we see today.

Funny enough though lay-bys are coming back in vogue again. Consumers are not as dumb as we first thought. After getting their shirts scared off them by the GFC many are now starting to think for tomorrow by sacrificing something from today. Home cooking is back (thank god), growing vegies is cool again and some urban homes even have chooks for eggs.

But what I am trying to get across is that our government is responsible for much of our problems - it punishes those who save with heavy taxes, but rewards those who go into debt. It does not want money to sit idle in the banks doing nothing but grow. It wants the money out there feeding the egos of our politicians and their jobs. Money sitting in the banks means the savers are getting richer and not sharing their hard earnings with the public. How do you stop that? By bumping up inflation - nothing motivates buyers into emptying their bank accounts like rampant inflation. Great! How brilliant! Now what? Oh, the banks now have no deposits left to for home loans. So it needs to go offshore for wholesale findings. Of course the local banks cannot control what they pay for that funding and it will show up in higher and higher interest rates down the road.

The problem is for it to continue to work tomorrow's economy must continue to grow. But what we need to be careful of is that we now have an over supply of labour due to globalisation, which removes prospects for earnings on developed nations and increases earnings on developing nations. For now Australian workers still have an upper hand against many other countries when it comes to higher wages. But it would be naive to believe that status quo will remain intact while we purchase items from those who earn less than us. While that purchasing pattern continues slowly but surely there will come a time where we will earn roughly the same as those who make our shirts and DVD players.

That is the point of reckoning. That is the point we look in the mirror and see we were going wrong. All this time we've been buying up on credit, which was made possible by our rich assets. And the higher our assets went the more credit we had for spending. Look at what we pay here for any kind of service compared to 20 years ago. Look at what we pay here for a TV compared to 20 years ago. Can you see what is happening? By importing deflation we have allowed local inflation (services) to go ballistic.

So even though we sell commodities to the world we are still spending more than what we earn. Our nation is running on fumes provided by housing and mining. We don't produce enough goods of tangible value - we mostly produce services that are fuelled by high levels of credit accessibility. As we witnessed in America we now know that you cannot grow on the wealth of assets - you must produce something to back up your debts - and that is something of true value such as food, clothing and shoes.

Globalisation has been great for the western world. But like anything that is great in our lives (such as alcohol, fatty foods, etc) it has many side effects. Denial is our greatest enemy.