We're so far from the golden age of capitalism that I've got to remind people that that's what the 50s and 60s were described as. The low level of private debt meant that people could spend money comfortably. And ever since then, it's been an upward trend. We've now got to the point where we believe we've got to keep the financial parasite alive. It's what's causing most of the instability. Then the best way to solve will be to reduce the level of private debts. That would do a lot to reduce income disparity as well.
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?
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