Jump to content
House Price Crash Forum
Sign in to follow this  
Beggar Thy Children

When We Be Able To Put 'that' Von Mises Quote To Bed?

Recommended Posts

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

Let's analyse this a bit.

OK so we certainly had a 'boom brought about by credit expansion', of that there can be no doubt. But there has been no 'final collapse' of that boom so far. In fact from a UK perspective it looks like everything is ticking along nicely now bar a few small bumps in the road. Mises says there is no avoiding it though. It MUST collapse, apparently. Did 2008 count as collapse? Not by my understanding of the word 'collapse' it didn't. So if the prophesy is correct this final collapse must still be to come.

Looking at the second half of the quote, as far as I can make out there has been no voluntary end or even plan to voluntarily end credit expansion...

So the only option left presumably is now a collapse consisting of the 'total catastrophe of the currency system involved' which I know the goldbugs will state we are witnessing right now but personally I'm not seeing it.

Did Von Mises give a timescale for this total catastrophe? I mean do we have to wait 6 months, 1 year, 5 years or 20 years before we know if he was talking sh!te and Gordon knew better?

Share this post


Link to post
Share on other sites

So all banks going bust without support wasn't good enough for you.

0% rates and unprecedented amounts of money printing is not good enough for you

With continuing falls in asset prices, it isn't good enough for you.

Rolling sovereign defaults (read research book by Rheinhart and Rogoff) isn't good enough for you.

This hasn't actually ended yet you know.

Kids today. Sheeesh.

Yep, all the banks would have collapsed without support. They got support and didn't collapse.

interest rates at 0% and billions printed and as that Tory peer said recently, most people have 'never had it so good'

I'm not seeing any asset price falls other than can be put down to noise in the data or a slow drift down. Not exactly 'collapse'.

No 'rolling sovereign defaults' that I can see

What can I say, I'm only alive for another 50 years or so, call me impatient :P

Edited by Beggar Thy Children

Share this post


Link to post
Share on other sites
Guest spp

or later as a final and total catastrophe of the currency system involved.

They have chosen this route.

Indeed.

Over time we always borrow more than our productive efforts can pay back and proceed to crash the money system. FOA

Share this post


Link to post
Share on other sites

So the only option left presumably is now a collapse consisting of thewhich I know the goldbugs will state we are witnessing right now but personally I'm not seeing it.

Did Von Mises give a timescale for this total catastrophe? I mean do we have to wait 6 months, 1 year, 5 years or 20 years before we know if he was talking sh!te and Gordon knew better?

They have rolled the problem over, so it's 'total catastrophe of the currency system involved'.

Currently we are seeing the system teetering on the brink. Just like watching a man standing on the cliff top at Beachy Head, who all of a sudden is gone from view, for a while everything will still appeal normal, then the next day it'll suddenly be total meltdown.

Patience Grasshopper. :ph34r:

Share this post


Link to post
Share on other sites

So the only option left presumably is now a collapse consisting of the 'total catastrophe of the currency system involved' which I know the goldbugs will state we are witnessing right now but personally I'm not seeing it.

Unfortunately for us all, the final collapse is exactly what is going to happen. It is taking place as we speak in slow motion.

Share this post


Link to post
Share on other sites

Unfortunately for us all, the final collapse is exactly what is going to happen. It is taking place as we speak in slow motion.

Exactly how unfortunate it is for you is going to depend on what financial bets you have placed.

Having said that, the Americans are very likely to throw their toys out of the pram and start WW3, either in response to having their spoilt bottoms spanked or in an effort to avoid having it spanked in the first place. Cue Iran attack to deflect eyes from dollar collapse and solidify theft of Middle East oil order to maintain US global hegemony and neutralise any regional opposition for their Puppet Masters in Israel.

obama_israel.jpg

Edited by General Congreve

Share this post


Link to post
Share on other sites

I really don't know what to do with my money at the moment.

One the one side I here about the "dash for assets" , others say that "cash will be king" and another lot say "get in debt as far as you can"

I've got a few k floating around and can't decide whether to save it, spend it, pay off the mortgage, leverage it, buy gold, buy a BTL, buy a forest, buy oil shares.............

I've never been so uncertain and uneasy. And not just financially.

Everything just seems ******ed up - the economy, politics, society, the environment......

Share this post


Link to post
Share on other sites

Did Von Mises give a timescale for this total catastrophe? I mean do we have to wait 6 months, 1 year, 5 years or 20 years before we know if he was talking sh!te and Gordon knew better?

You are trying to predict the future, economics cannot help you in that.

Share this post


Link to post
Share on other sites

I really don't know what to do with my money at the moment.

One the one side I here about the "dash for assets" , others say that "cash will be king" and another lot say "get in debt as far as you can"

I've got a few k floating around and can't decide whether to save it, spend it, pay off the mortgage, leverage it, buy gold, buy a BTL, buy a forest, buy oil shares.............

I've never been so uncertain and uneasy. And not just financially.

Everything just seems ******ed up - the economy, politics, society, the environment......

thats how you make a market and i wouldnt worry about the first line 90% of those who think they do know exactly what to do are going to be completely wrong anyway so if you are still undecided you may as well flip a coin, you might luck out

Share this post


Link to post
Share on other sites

Marx (another economist) said the working class would overthrow capitalism.

Economics is bunk. Economist's predictions are horse sh1t.

You fail to understand the context of when Marx was writing, at the time society lacked the comprehension of what technology could do, unlike the modern era where we are awash with science fiction. This lead many to conclude that we where at the pinacle and society and technology couldn't get an better. Due to that reason Marx predicted the end because he couldn't see the huge growth coming.

However Marx did predict domination by large monopolies, I would argue we are seeing that in the corporate area now.

The irony is the subprime crisis has triggered the crisis in the capitalist system, the poor weren't meant to have such macro economic power.

Share this post


Link to post
Share on other sites

I really don't know what to do with my money at the moment.

One the one side I here about the "dash for assets" , others say that "cash will be king" and another lot say "get in debt as far as you can"

I've got a few k floating around and can't decide whether to save it, spend it, pay off the mortgage, leverage it, buy gold, buy a BTL, buy a forest, buy oil shares.............

I've never been so uncertain and uneasy. And not just financially.

Everything just seems ******ed up - the economy, politics, society, the environment......

Grow a pair man!

Share this post


Link to post
Share on other sites

Exactly how unfortunate it is for you is going to depend on what financial bets you have placed.

Having said that, the Americans are very likely to throw their toys out of the pram and start WW3, either in response to having their spoilt bottoms spanked or in an effort to avoid having it spanked in the first place. Cue Iran attack to deflect eyes from dollar collapse and solidify theft of Middle East oil order to maintain US global hegemony and neutralise any regional opposition for their Puppet Masters in Israel.

obama_israel.jpg

Ah, the paranoid mindset of the Gold brigade on full display. OK, it is a laugh for those of us who have studied economics (and can see the Reaganomic solution in progress in the US)...but would you mind in the future keeping the anti-semitism to yourself you ******ing ***** ?

What sort of stupid **** thinks that the US is controlled by Israel?

Share this post


Link to post
Share on other sites

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

I initially hoped that they would voluntarily abandon further credit expansion and planned my finances on that basis. I saw the error of my ways and now see that they have abandoned any responsible control of the money supply. I have therefore minimised the amount of sterling cash I have in non-inflation protected accounts.

The catastrophe may be as simple as double digit inflation for several years. Who knows that the timing will be though? That will depend on "events".

I keep having to remind myself that a £ is just a promise to provide something in the future, those promises will be broken since too many have been made than can be kept.

Share this post


Link to post
Share on other sites

the thing about a total collapse in the sense of Mises, is that he s talking about the value of money.

collapsing an economy is of course impossible...it is made up of human effort and while there are people there will be an economy.

bankers on 20m, civil servants on average wage above the wealth producers, spending on non society projects by government, borrowing more than they have, all these things will go in an economy based on people and what they can produce.

Share this post


Link to post
Share on other sites
Yep, all the banks would have collapsed without support. They got support and didn't collapse.

What I would like to know is who is supporting the supporters, and how long can they keep holding it up for? ;)

Share this post


Link to post
Share on other sites

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

Let's analyse this a bit.

OK so we certainly had a 'boom brought about by credit expansion', of that there can be no doubt. But there has been no 'final collapse' of that boom so far. In fact from a UK perspective it looks like everything is ticking along nicely now bar a few small bumps in the road. Mises says there is no avoiding it though. It MUST collapse, apparently. Did 2008 count as collapse? Not by my understanding of the word 'collapse' it didn't. So if the prophesy is correct this final collapse must still be to come.

Looking at the second half of the quote, as far as I can make out there has been no voluntary end or even plan to voluntarily end credit expansion...

So the only option left presumably is now a collapse consisting of the 'total catastrophe of the currency system involved' which I know the goldbugs will state we are witnessing right now but personally I'm not seeing it.

Did Von Mises give a timescale for this total catastrophe? I mean do we have to wait 6 months, 1 year, 5 years or 20 years before we know if he was talking sh!te and Gordon knew better?

Yes, you can put it to bed. The best place to start is to examine historical credit busts around the world. A recent one for example happened in Sweden

You'll see clearly by this one example that a suspension of further credit is not a catastrophic event if done correctly. Witness the UK today for example. Credit is not going anywhere, but the economy is growing.

Option one under von Mises is not necessarily a catastrophic event. The Austrian theory has been largely discredited. Whilst it is a good little story for explaining why a credit crunch can occur, it offers little aside from high inflation as a solution. At the end of the day, we had some silly debt financed acquisitions eg EMI, but it is foolish to think that the BOE's monetary policy of the late noughties encouraged too much corporate malinvestment. In fact, if you look carefully at company balance sheets around the world, you'll see a lot are sitting on big cashpiles.

No, it was a good old-fashioned asset bubble. A mania. The majority of the UK population is up to its eyes in debt as a result. (Mild) inflationary growth via Reaganomics is the political solution and that's what we're getting.

Share this post


Link to post
Share on other sites

I really don't know what to do with my money at the moment.

One the one side I here about the "dash for assets" , others say that "cash will be king" and another lot say "get in debt as far as you can"

I've got a few k floating around and can't decide whether to save it, spend it, pay off the mortgage, leverage it, buy gold, buy a BTL, buy a forest, buy oil shares.............

I've never been so uncertain and uneasy. And not just financially.

Everything just seems ******ed up - the economy, politics, society, the environment......

+1. Only advice is NOT to pay off the mortgage, and have the cash eqivalent. You can spend the cash if it all goes t!ts-up, and the mortage is someone else's problem. I have no gold, and feel it's a bit late now.

Otherwise cash short-term @ 2%, max share ISAs; and 2 skiing holidays at least :)

Share this post


Link to post
Share on other sites

Yes, you can put it to bed. The best place to start is to examine historical credit busts around the world. A recent one for example happened in Sweden

You'll see clearly by this one example that a suspension of further credit is not a catastrophic event if done correctly. Witness the UK today for example. Credit is not going anywhere, but the economy is growing.

Option one under von Mises is not necessarily a catastrophic event. The Austrian theory has been largely discredited. Whilst it is a good little story for explaining why a credit crunch can occur, it offers little aside from high inflation as a solution. At the end of the day, we had some silly debt financed acquisitions eg EMI, but it is foolish to think that the BOE's monetary policy of the late noughties encouraged too much corporate malinvestment. In fact, if you look carefully at company balance sheets around the world, you'll see a lot are sitting on big cashpiles.

No, it was a good old-fashioned asset bubble. A mania. The majority of the UK population is up to its eyes in debt as a result. (Mild) inflationary growth via Reaganomics is the political solution and that's what we're getting.

debt upon debt is clearly the answer..

where has the Austrian theory been discredited?...only in the minds of printers and bailed out bankers.

the only growth we see in the UK and the US is in the figures of GDP...well, apart from unemployment, of course, GDP is made up of various items, one of which is Public spending....so sure, you can have GDP growth and not have ANY additional wealth production at all...but what you get is the slow impoverishment of the populace......which leads to where Mr Clever Hat??

Unlike the theory of the Universe, debt cannot be infinite....the end of it can only be...collapse

and reading of the Swedish example, they bailed their bankers with taxpayers money...ie, they took from one party to give to the other...Moral Hazard was invented...

now, what if these same bankers had been allowed to lose their jobs....oh yeah, some savers would have lost their deposits, but the system would have been wiped, lessons learned and NO MORAL HAZARD.

And look what they were preventing...HOUSE PRICE FALLS.

Just wondering where Sweden are today?

Edited by Bloo Loo

Share this post


Link to post
Share on other sites

I initially hoped that they would voluntarily abandon further credit expansion and planned my finances on that basis. I saw the error of my ways and now see that they have abandoned any responsible control of the money supply. I have therefore minimised the amount of sterling cash I have in non-inflation protected accounts.

The catastrophe may be as simple as double digit inflation for several years. Who knows that the timing will be though? That will depend on "events".

I keep having to remind myself that a £ is just a promise to provide something in the future, those promises will be broken since too many have been made than can be kept.

Where is the evidence of the further credit expansion you speak of? Have you seen the numbers for mortgage approvals lately?

Where is your evidence of the BOE abandoning control of money supply? Look at the graphs. The big worry for them at the moment is that the money supply could contract further.

Do you understand that QE is reversible? That the BOE will sell its gilts in the future and set fire to the proceeds?

Why do you think inflation has to go double digit? What about compounding? Just 2.5% inflation for 10-20 years will have a massive impact on the national debt.

You are right to minimise your cash holdings, but that is always pretty much a truism. Don't allow yourself to get tucked up by Soros et al though. He's already taking profits. Why would he do that? Anyone still holding Gold after they've announced all their sales is going to lose a lot of real money - and by real, I mean GBP or USD. It is amazing how long these manias can continue for. I'd have thought buyers placing ads on the TV to buy Gold from chavs was a big enough indicator of a bubble. What next? Sarah Beeny's "Gold Ladder"?

Share this post


Link to post
Share on other sites

Where is the evidence of the further credit expansion you speak of? Have you seen the numbers for mortgage approvals lately?

Where is your evidence of the BOE abandoning control of money supply? Look at the graphs. The big worry for them at the moment is that the money supply could contract further.

Do you understand that QE is reversible? That the BOE will sell its gilts in the future and set fire to the proceeds?

Why do you think inflation has to go double digit? What about compounding? Just 2.5% inflation for 10-20 years will have a massive impact on the national debt.

You are right to minimise your cash holdings, but that is always pretty much a truism. Don't allow yourself to get tucked up by Soros et al though. He's already taking profits. Why would he do that? Anyone still holding Gold after they've announced all their sales is going to lose a lot of real money - and by real, I mean GBP or USD. It is amazing how long these manias can continue for. I'd have thought buyers placing ads on the TV to buy Gold from chavs was a big enough indicator of a bubble. What next? Sarah Beeny's "Gold Ladder"?

HA HA HA

sorry, monetising debt that has been loaned can be returned...at completion of the term.

QE HAS NO TERM..the FIAT IS ISSUED and there is no method of repatriation.

Even Merv has admitted they have no idea how to get it back.

Share this post


Link to post
Share on other sites

He doesn't need to its a p1ss in the ocean.

not really, it is more than the DEFICIT of the UK...if it was a piss in the ocean, then the deficit would be painless.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.