Denial: The Adversary of Conscience

Denial has long been seen as the source of repetition, repetition of history. History is a benchmark for change, but even history cannot be the sole informant for future actions. A perfect financial market is characterised by its incompliance to historic movements. Information cannot be filtered through to stock markets to effect substantive change. However, our utopian desires have been slapped by the financial hurricane we find ourselves in right now. The mounting unrest has left many authorities concerned, particularly China, as the looming recession has threatened job security immeasurably. Social imbalance has been instigated by denial of recession, and once again the continued downturn has been a self-infliction by Government officials. It appears that high-rank executives and government authorities are eschewing accountability, but how does this bode for the wider economy. Are we seriously entering into a world of anarchy, because accountability is an embodiment of power, but this power is no longer manifold?

The sub-prime market was a jack-in-the-box endeavour for quick cash, but such pursuits are short-lived. The high credit risk of borrowers was growing amid rising inflation, but we were blinded by the euphoria of unprecedented returns, and now the domino effect is being felt across several sectors worldwide. China has been the latest economic powerhouse to be hit by this downturn, seeing its exports plunge to record lows as a result of falling demand from the West. The government has voiced there concerns, citing the possibility of social unrest should China fail to sustain its current growth rates. Simultaneously, several export companies have filed for bankruptcy, leaving several blue and white collar workers alike unemployed. Export is the engine of their industrial economic growth, and this crisis has put them in a highly precarious position. The Baltic Dry Index below illustrates the fall in commodity confinements i.e. ore and coal.


Since May exports have experienced a massive drop. This cannot be termed a slight blip in their remarkable performance, and validates the jitters of the Chinese government. Their stimulus package of $586 billion may soothe the worries of investors slightly, but their overall fate lies in the performance of global economies. An expansive resource base is essentially futile without corresponding demand, and the fading prospect will inevitably leave officials in doldrums. To acknowledge the current state of our global economy is the key to future development. China has publicized their anxieties, setting a precedent for those who have become infatuated by their own denial. Hence, it is time to follow suit!