This has created somewhat speculative economies, overly reliant on cheap money (whether mortgage debt or otherwise) that has then funded serial asset price bubbles. Rather than a shortage of housing supply, as is often postulated as the key reason for high house prices, it’s the abundant and rapid growth in mortgage debt that has been the key driver in recent decades. The massive growth of mortgage debt across most of the world’s major economies is one key example of this. That process has been aided and abetted by global regulators and central banks that have largely ignored monetary targets and money supply growth. These include the unending liquidity that has been created by the commercial and central banks under this anchorless international monetary system. This system has now reached the end of its usefulness.Īn understanding of the drivers of the 30-year debt supercycle illustrates the system’s tiredness. When that broke down at the start of the 1970s, the world moved on to a fiat system where the dollar was not backed by a commodity, and was therefore not anchored. At the end of the second world war, a new international system was designed - the Bretton Woods order - with the dollar tied to gold, and other key currencies tied to the dollar. Intra-wars, most economies returned to a “semi-hard” gold standard. She added: “The best memorial we can build to those who have lost their lives is a greener, smarter, fairer world.Prior to the first world war, major economies existed on a hard gold standard. We have to use all the strength we have to turn a page and have history be about the Great Reset and not the Great Reversal.” “That led to a better country after the war and to a National Health Service that is saving so many lives today. She urged global leaders to recognise the success of the 1942 Beveridge report, which put forward reforms to raise welfare and health standards across Britain, and was ready to be implemented when the war was over. Speaking at the same event, International Monetary Fund boss Kristalina Georgieva said the world economy faced a similar situation to the UK in the second world war. The WEF, which stages an influential annual gathering of business and political leaders at its annual meeting in the Swiss ski resort of Davos, has come under fire from anti-poverty groups in recent years for failing to tackle climate change and executive pay.Ĭharles’s speech was part of a launch event for The Great Reset, a project involving the WEF and the Prince of Wales’s Sustainable Markets Initiative, aimed at rebuilding the economic and social system to be more sustainable. Accelerating green investments can offer job opportunities in green energy, the circular and bio-economy, eco-tourism and green public infrastructure. Humanity is on the verge of catalytic breakthroughs that will alter our view of what it possible and profitable in the framework of a sustainable future. Science, technology and innovation need re-invigorating. Carbon pricing can provide a critical pathway to a sustainable market. Systems and pathways must be redesigned to advance net zero transitions globally. Longstanding incentive structures that have had perverse effects on our planetary environment and nature herself must be reinvented The economic recovery must put the world on the path to sustainable employment, livelihoods and growth. To capture the imagination and will of humanity – change will only happen if people really want it. Its unprecedented shockwaves may well make people more receptive to big visions of change,” he added. “We have a golden opportunity to seize something good from this crisis. He said that the pandemic, which has forced governments worldwide to mothball their economies, had showed people that dramatic change was possible. “We have a unique but rapidly shrinking window of opportunity to learn lessons and reset ourselves on a more sustainable path,” said Charles, who himself has recovered after suffering mild symptoms of Covid-19. The prince emphasised that the private sector would be the engine of recovery and was heartened by the pledges from business leaders to recognise the damage to the environment that would result from an unfettered dash for growth.
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