Yestderday saw further falling stocks and oil price rises, in what has become a far too normal day of news. Leading the crisis was the failure of recent OPEC talks. Though price are skyrocketing (Brent Crude is now around $120/barrel), oil producing nations have been unable to increase output.

The world has been faced with a lot of economic bad news lately, and yesterday was no exception. The TSX is now down 7 days in a row. The Americans are reaching their legal “debt ceiling” and many are talking of a default. Obama is now planning for “one last stimulus” – a payroll tax cut which hopes to change sagging employment figures. There’s also big layoffs in the works at many of the largest financial institutions in the world – such as JP Morgan and Bank of America. Fears about the stability of the American, European and Chinese economies is causing many people to worry heavily about the globe as a whole.

Two key stories have come forward in the past few days that really illustrate how rotten things have become, and on what kind of scale. There’s the exploding scandal around Sino-Forest, a Chinese forestry firm listed on the Toronto Stock Exchange. It appears to have been using a convoluted web of subsidiaries and a lot of imaginary trees to bilk investors for millions. Another brewing story involves the enormous African land grab by hedge funds, unearthed by a new Oakland Institute study. In 2009 these hedge funds bought up 60 million hectares of land – an area the size of France – displacing millions to grow cash crops for export.

Faith in the global economy is fading fast. With all the talk of a failing recovery and “double-dip recession”, it’s starting to become clear that this is not just like the recessions of the past. This isn’t just another correction or recession. When markets failed in the past (something that’s happened at least once a decade for most of our lifetimes), they could always turn to expansion. They could open up new foreign markets, pump more fossil fuels or take on more debt. These aren’t long-term solutions, though, and we’re running out of band-aids. Many fear that another market crash is in the near future, but the real threat is a long, grinding decline in our fortunes. What do we do if endless, perpetual growth is no longer an easy option?

Advertisements