The rise and fall of capitalism

So there you have it - the world financial system is in tatters, with countless banks, investment houses and blue-chip corporations reporting record losses. Countries are teetering in the brink of bankruptcy - the government in Iceland has already fallen - as they pump trillions of dollars into the economy.

The US is a case in point. Having led the way of consumerism and free market economy, the spend spend spend culture, which depends solely on borrowings, has crashed and burned.

With one of the lowest savings rate in the developed world - Malaysians are eager beavers in this aspect compared to Americans - the US economy is in shambles. Starting from the sub-prime mortgage fallout, the domino effect of loose spending without adequate collateral or safeguards has had a tsunami effect on Wall Street.

Now, the Obama administration is in the midst of trying to push through a multi-trillion dollar bailout through a reluctant Congress.

But all it will do is merely delay the inevitable - a shocking decline in the US GDP and concurrent decline in the standard of living of its citizens.

The US in the end will have to be bailed out - perhaps by their Mid-East partners Saudi Arabia, and perhaps even by China in the long run.

The European economy is similarly shaky, having fallen hook line and sinker for the American way of pushing its business-at-all-costs method.

The rest of the world has also begun to suffer, with Japan leading the way in terms of non-performers among the industrialised nations. Two of the world's biggest economies: China and India, are also struggling from the knock-on effect of US mismanagement.

Karl Marx said, in the Communist Manifesto, that capitalism is inherently unstable. It took a while, but it looks like he may be proved right after all...