by Bill Bonner
08/24/12 Ouzilly, France – Economists cannot know what is ‘better.’ They can only know what is ‘more.’ They have numbers. They can count. They can add up ‘more’. As for ‘better,’ they have no idea. So, in their little minds, more is better.
That is the thinking that has driven the profession…and much of the world economy…to absurdity. Throughout the last 50 years, more looked so much like better, no one worried too much about the difference. More cars. More houses. More food. More gadgets. What was not to like?
But the cost was more debt. And by the 21st century the burden of debt had become so great that the system could no longer move forward. Here is how it worked, up until the early spring of 2007:
The Chinese, and others, made more stuff. The Arabs, and others, pumped more oil.
Americans, and others, created more credit and used the money to buy more stuff.