Thread by @svembu

Globalization has become a sophisticated and central bank enabled form of vendor financing. Countries import goods they have no means to pay for except debt.

Result? Countries like Sri Lanka in a serious debt trap.

There is no alternative to building skills and know-how.

Academic economists see that debt fueled consumption and mistake it for prosperity. The unemployment that arises from a population not having the skills and know-how to produce the very goods we consume with debt is seen as a separate problem.

They are the same problem.

As countries drown under debt, even the countries that vendor financed on a large scale face a severe crisis.

Solution? We have to spread the skills, know-how and the formal knowledge to produce (in that order) far and wide so poulations can help themselves.

Capitalism cannot work under a regime of unlimited central bank enabled vendor financing, which how I describe globalization. The toxin of debt accumulates in the system and eventually overwhelms it.

Market fundamentalists ignore the central banks and preach free markets.

I have always told our engineers "if something is too expensive for us to buy, it is a signal we must develop the know-how to make it". That's a natural market signal - the message "we can't afford it".

Central Bank assisted vendor financing destroys that signal and ...

... distorts incentives to acquire the know-how to help ourselves. The widespread cultural message is "if we can't afford it, we can borrow to afford it!" - even as our own sons and daughters go unemployed.

There is no durable prosperity in that path.