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Dorkins

In Defense Of Economic Depression

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I am not convinced that the build up of excess borrowing is global.

the excess may be described as either excess borrowing OR saving. it doesn't matter really. the cause and effect of the two is any case circular and recursive so there is no point trying to unpick the root cause.

Excess borrowing is an implicit transfer of power from borrowers to lenders.

that depends on the resolution regime, which is a political decision. Beware democracy. In the depths of the great depression, in 1933, gold was revalued. How is that a transfer of power to lenders?

As long as the financial power of lenders is matched by their military power, this transfer will occur with a whimper rather than a bang.

except that is not the case this time. The borrowers are westenr nuclear armed nations operating liberal democracy.

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Sceppy, if ever I found the very definition of 'useful idiot', it's you.

I'll take that. We're all idiots and I'd rather be useful than useless.

You're absolutely grasping in this thread, even by your own standards. WWII effectively began at the bottom of the Great Depression in the US. With your sample size reduced from 1 to 0, where does this leave your argument?

I'll leave that one if you don't mind, and instead point out that the bottom of the great depression was in 1933 when the household saving rate was -2%. WWII came 5 years later.

My argument remains very much intact and operational thank you very much. I look forwards to a more convincing assault.

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We know that is in fact not true don't we?

Default?

True in many instances their equity is wiped out and the lender walks away with the asset, but we've seen an awful lot who have cashed out and then defaulted on adevalued asset and given it back to the lender.

regardless, the fact is the defaulter ends up with no financial assets, and no other assets besides perhaps the odd plasma TV and some good memories. Even those are up for confiscation.

the norm of recent times has been that borrowers transfer wealth to lenders, which is a schme I have no issue with when the economy is growing, the population puramid is a healthy shape and the process is essentially a mostly benign one of inter generation welath transfer. As long as the young borrowers get a chance to be rentiers when they get old, assuming they have been reasonably sensible.

Huge commercial property fraud to this effect. Where is the Icelandic money? Strategic defaulters in the USA. NAMA in Ireland. Loans made to the Scottish mafia by Peter Cummings of HBOS. etc etc

once again this is a case of picking at details so as to avoid glancing at the big picture, which burns your eyes out and disproves all the libertarian fallacies.

the big picture is that once the multinational corporate sector has fired every last worker, shrunk their operations to a bare minimum and re-hired the disposessed as slave labour, they'll still be sitting on all the dosh that remains. The fact they may have burned much of their original stash up via default, plunging demand etc doesn't matter - because there won't be any other money*.

* except there's another reason why its different this time. Actually people now have all the tools they need to create their own money, should the austerians succeed in making money exceedingly scarce. So ultimately the austerians and hard money men lose, unless they can destroy the internet.

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I'll leave that one if you don't mind, and instead point out that the bottom of the great depression was in 1933 when the household saving rate was -2%. WWII came 5 years later.

There was a second crash in the US in the late 30s. The Depression was a double dip for the yanks, and the second dip only ended when they started making tanks.

Indeed, the massive slack in the US economy was what allowed them to make so many tanks, there was loads of plant just sitting idle waiting to be converted to make armaments. In that regard I suppose the Allies were quite lucky that there was this ailing industrial democracy there with masses of metalworkers and steel refineries all doing nothing, until they started swapping tanks for foreign gold, anyway.

After the war 16 million men were demobilised in the US almost immediately. You would expect such a massive cut in public spending to cause a recession, no? This did not happen.

Edited by EUBanana

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There was a second crash in the US in the late 30s. The Depression was a double dip for the yanks, and the second dip only ended when they started making tanks.

yes, that is what made WWII inevitable. the fear of inflation.

Indeed, the massive slack in the US economy was what allowed them to make so many tanks, there was loads of plant just sitting idle waiting to be converted to make armaments. In that regard I suppose the Allies were quite lucky that there was this ailing industrial democracy there with masses of metalworkers and steel refineries all doing nothing, until they started swapping tanks for foreign gold, anyway.

which is why depressions lead to international war in the past. Its too easy. but that won't happen this time. it will be civil war. excess capacity doesn't assist in this case.

After the war 16 million men were demobilised in the US almost immediately. You would expect such a massive cut in public spending to cause a recession, no? This did not happen.

yes it did. The recessionof 1945, closely folowed by the recession of 1949, which was exited thanks to deficit spendnig on the korean war

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* except there's another reason why its different this time. Actually people now have all the tools they need to create their own money, should the austerians succeed in making money exceedingly scarce. So ultimately the austerians and hard money men lose, unless they can destroy the internet.

its the central planners who are likely to want to destroy the internet - cant have people learning how the economy/politics/wars etc really work

the debtors and the savers -

link

The two classes are not the Labour and the Capital, the rich and the poor, the proletariat and the bourgeoisie, or the workers and the elite. The two classes are the Debtors and the Savers. "The soft money camp" and "the hard money camp". History reveals the story of these two groups, over and over and over again. Always one is in power, and always the other one desires the power.

1. Debtors - "The soft money camp" likes to spend (and redistribute) money it did not earn, either by borrowing it, taxing the savers for it, or printing it. They like soft money because it is always and everywhere constantly inflating, easing the repayment of their debts.

2. Savers - "The hard money camp" likes to live within their means and save any excess for the future. They prefer hard money (or in some cases "harder" money) because it protects their savings and forces the debtors to work off their debts.

1789, the French Revolution, "the hard money camp" had been in power since 1720 when John Law's soft money collapsed, and starting in 1789 "the soft money camp" killed "the hard money camp" and took back the power. This is the way "the soft money camp", the Debtors, usually take power... by revolting against the hard repayment of their spending habits.

Only nine years later, 1797, soft money collapsed once again (as it had just done in 1720) and a new French monetary system based upon gold was again reinstated. This is the way "the hard money camp", the Savers, almost always regain control: when the soft money collapses. On very rare occasions and only under highly favorable circumstances (like moving to a new continent!), "the hard money crowd" takes control by physically separating from "soft money" and declaring independence from the Debtors.

The American Revolution. Yes, the Constitution mandates hard money.

So just to repeat for clarity: Hard money regimes almost always end in bloodshed, when the soft money camp slaughters the hard money camp to avoid hard repayment terms.

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its the central planners who are likely to want to destroy the internet - cant have people learning how the economy/politics/wars etc really work

in this case the central planners are the austerians, and they are also the people who suddenly want hard money.

"1789, the French Revolution, "the hard money camp" had been in power since 1720 when John Law's soft money collapsed, and starting in 1789 "the soft money camp" killed "the hard money camp" and took back the power. This is the way "the soft money camp", the Debtors, usually take power... by revolting against the hard repayment of their spending habits.

"

are you really extolling the 'virtues' of Louis XVI's ancien regime here?

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  • 200 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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