Recently the world’s central bankers gathered in Jackson Hole, Wyoming for their annual meeting. Having experienced the biggest banking crisis in history, there was a sense of relief at having avoided a complete collapse. The talk now was of the dust settling. Ben Bernanke, chairman of the US Federal Reserve, despite saying a month earlier that the outlook was “unusually uncertain”, said he was now “confident”. But such confidence is very much misplaced. With the world economy facing at best a painful recovery, and slow anaemic growth, the world’s bankers are deeply troubled as to what steps to take next.

The recent G20 summit in Toronto brought to the surface all the contradictions of global capitalism. Every capitalist nation wants to climb out of the crisis at the expense of its competitors. Everyone is calling for demand to be kept up, while at the same time applying cuts in public spending at home. At the heart of this are the mountains of debt that have accumulated everywhere.

Goldman Sachs has been accused of fraud and is up before the American Securities and Exchange Commission. What is coming out of all this are the clever tricks of the trade, i.e. how to make money from money, without actually investing in the real economy, and in the process “advise” people on how to lose their money while making the likes of Goldman Sachs very rich... until it all crashes of course.

As the world economy emerges from recession it is clear that the recovery is going to be weak. All governments also face a huge debt overhang, which means that whoever is in power will have to carry out stringent economic measures and it is the working class who will be made to pay. This opens up the prospect of huge class contradictions opening up in the coming period.

Billion dollar refineries are closed in one part of the world, while others open elsewhere. This is the craziness of the global capitalist economy. It wastes huge amounts of material and human resources, whereas these same resources could be used in a global plan to develop the economy in way more in line with the interests of all the people of the world.

Banks are paying out huge bonuses to the very same speculators who were responsible for the credit crunch in the first place. Banking is to remain a financial wild west. If we want a financial system that works for the interest of the people we need to get rid of the whole capitalist system.

General Motors has announced that it will cut 8,300 jobs in Europe alone in a bid to reduce its overcapacity. The first plant to go was in Antwerp, Belgium. Workers in other GM plants, and in the whole industry, must now unite and resist in order to defend their jobs and living standards.

The world of international finance has been shaken by the default in Dubai. Commentators have suggested that this could be the cause of the recession moving into a double dip. Now the Greek government is running a government deficit of 12.7% of GDP, which is more than four times the permitted European maximum. Capitalism stalks one country after another, probing for weaknesses and laying the weakest low. This system is inherently unstable. As long as it exists, it threatens all our livelihoods.

Big banks like Goldman Sachs have become flush with free money and have been announcing mega-results for the third quarter of last year. They have also started to pay huge bonuses again for bankers and directors. So it’s business as usual for capitalism - at a time when a record number of Americans (32million) are on food stamps, unemployment of various sorts has reached 16% of the workforce and people are losing their homes.

Why is New Labour hurling yet more of our money at the banks? The latest handout has been described as the ‘world’s biggest bank bailout.’ It’s costing every household in Britain £2,000, on top of all the money wasted last time round.

The world of international finance has been shaken by the default in Dubai. Shares have taken a tumble all over the world. Commentators have suggested that this could be the cause of the recession moving into a double dip, of a further downturn in the world economy.

For the capitalists, this Great Recession could be more or less over, but the level of spare capacity in industry and construction together with the level of debt still owed by businesses, government and households alike mean that this recovery may be stunted. Every major capitalist economy now finds that it has more than 30% more capacity than it needs to meet demand. That is a record high of overcapacity in industry.

The capitalist system is passing through its deepest crisis since the 1930s and the Great Depression. The apologists of capitalism – including those in the labour movement – had completely ruled out such a scenario. After all, they explained, capitalism has changed and governments are now able to over-come any deficiencies experienced by the markets. They have learned the lessons of the 1930s.

Some economic commentators and financial journalists have divined the ‘green shoots’ of economic recovery’ growing out of the present crisis. Perhaps the wish is father to the thought. Are they right?

The knock-on effects of the crisis have already hit Hungary, Lithuania and Latvia. Other countries in the region are also in the firing line. Governments are going down like ninepins. There is no end in sight to the economic and political turmoil. The so called "emerging" economies have been brought to their knees.