Will We Crash Again???...

[Rockhopper]

Prof Steve Keen discusses the modern Capitalist boom bust cycle.



And we are in the poopsie!



Tim.

[Stargate]

Tim, I think the second video says it all. The 2008 crisis was never over, and China was never going to last long considering the speed of which their economy was going. People are complacent because the money they have is coming from low oil prices and not production.
There is no way the world economy can maintain productive levels, when most of the main stream economies are debtors like the US, who cannot rise interest rates. It is only a matter of time, only recovery will not be in our life time.
We have to admit Putin has worked hard to bring the dollar down, (BRICKS) and it looks really bad for 2016-17.

[Lenzabi]

Of course there will be another crash. They propped up the "Too big to fail/jail" banksters, Iceland had the right idea, jail the buggers for fraud, revamp the economy, and they are in the best shape now due to it, here and in Europe, they are setting up for another failure, and China is also set to burst.

[Rockhopper]

Of course we'll crash again Len and Star. Unless we make dramatic changes to how we run things.



Tim.

[Stargate]

Tim, I am a simple man, and it seems there is no simple way of looking at the whole thing so it can fit in my brain. If people were able to understand that world production is down, you cannot use a vertical system without expansion, it's just impossible. You cannot build up one part of the world and think it is not going to eventually pose a problem.

The world has not remained stagnant, the first, and second world has forgotten the so called third world. There is a price to pay, because now they cannot
in-cooperate third world nations when they are not ready. There is also the problem of demographics, mind you it's a bigger problem than they tell the people. The way I look at it Tim, and Lenny, the problem is much worst than just money, or economics.
Capitalism, just the same as communism cannot work if there is no socialism. This is a whole planet with whole people, it cannot be split up into, black, and white, first and second, there has to be balance, and there is none.

[Mordae]

That there will be another crash, both bigger and badder than the last, is inevitable. Nothing has changed in fiscal policy from the last crash, no safeguards have been put in place and the fact Japan and the EU are into negative interest rates signifies that they are out of ideas.

The basic concept of negative interest rates is that it impacts savers who then use that formerly unacessible money to stimulate the economy. Problem is that everyone has enough stuff or have to much debt to afford more stuff. It's now the Have's, the Have-Not's and the Have-But-Have-Not-Paid-For-It-Yet's.

Worth noting that Steve Keen and Peter Shiff were two of about twelve economists who accurately predicted when and how the last crash would happen, and both are saying the same thing again...probably worth paying attention too

[Rockhopper]

Good to see ya back again Mordles, front's pretty good too!

Yep, you're right, nothing has changed and the next crash is going to be a doosey!

Tim.

[Lenzabi]

Hey Mordae! Yep, no one learned (except the Icelanders), and so we will boom/bust yet again sadly.

[Mordae]

I suspect the next one will be more bust than boom, and will stay like that for a fair while.

When you think about it, the value of a dollar is based on peoples belief that it is worth a dollar. In actuality, it is worthless, as the vast majority of all currency is now basically fiat, of as much value as a priests indulgence during the Dark Ages.

It also begs the question...What happens when enough people work this out?

[Rockhopper]

Here's how it works;

Dave decides he would like a bigger, better house, so he sells his current house to John. John needs $100,000 to buy Dave's house so he goes to his bank and arranges a mortgage for that amount. The bank says yes and Kapow - $100.000 is created out of nothing and John is committed to paying that amount with real $'s ($'s that he has to work for and earn by productivity), by installments.

The bank charges interest on that nothing (how they make a buck) and the economy has been just loaded with $100,000 of debt.

If Dave decides to build a new house then the economy has gained a material advantage (two houses instead of one) but if Dave buys an existing house the economy has only gained more debt. So the cycle continues.

Eventually the economy collapses under the debt burden and the 'Bubbles' that method creates. And John finds himself out of a job so he defaults on the mortgage and the bank takes the house and sells it (hopefully). A house attained by creating money out of nothing and being sold and paid for with real money (productivity). Who is the loser here? The answer is the real economy not the bank.

Our economies are powered by debt and the only way we can keep them going is by creating more debt until the whole shebang collapses.

Tim.

[Stargate]

Tim, there is no system that is built without its own destruction, it really is only a matter of time. Perfection can only be found in imperfection, and versa, visa. The things is man made stuff goes much faster.

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