Monday, Apr 06, 2009
The financial system has suffered a blow unlike anything since the Great Depression
WSJ: From Bubble to Depression
It appears that both the Great Depression and the current crisis had their origins in excessive consumer debt -- especially mortgage debt -- that was transmitted into the financial sector during a sharp downturn.
It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption binge.
Posted by devo @ 11:12 PM (356 views) Add Comment
2 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Bear said...
It wasn't a consumption glut, it was a production drought. It matters not how much you consume, if you produce enough to satisfy needs. We don't need a fall in consumption, we need investment in production. Unfortunately, banks are only interested in speculation. Reduce taxes on the productive sector, Install tariffs against places that choose to competitively devalue, like China, and we could double our standard of living. Banks would then follow, because they don't lead, they speculate.
2. mr g said...
Regardless of how much you produce, you can't have consumption paid for by debt of the magnitude of the last few years.