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The Masked Tulip

A Debt-Filled New Year

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The Spectator is out today, with a cover story that I would commend to CoffeeHousers. Failure to learn from history usually condemns a nation to repeating its mistakes. That's why we should be nervous that no one seems to have worked out what caused the crash. Little wonder: the guys doing the analysis are the same guys who failed to spot the crisis building up, so it suits everyone to blame the banks. "How was I to know," says everyone from Gordon Brown to Joe the Pundit, "that they were doing all these complex debt swap thingies? They deceived everyone, the bounders." There is another analysis – and it's our cover story, written by Johan Norberg. He has been making his case in a short film (trailer here, if you can stand Brown’s cameo) and a book (for my money, the best written about the crisis). I thought CoffeeHousers may be interested in the bones of his argument – which I flesh out, below.

http://www.spectator.co.uk/coffeehouse/6578553/a-debtfilled-new-year.thtml

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"Crazy risk-taking by banks is a symptom of the easy money era. Yes, they did outrageous things – but from the tulip bubble onwards, people always do if the supply of money is not properly controlled.

...not true ....this time it was greed for turnover and market share which generated false commissions and bonuses....if the deals were flagged through but did not stand credit tests it was fraud...and where were the auditors...?....the people responsible should be pursued, tried and jailed ...and all bonus and commissions recovered by sequestration of their assets ....simple.... and people will think twice if tempted in the future .... :rolleyes:

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I'm not convinced the debt was excessive on a macro level. In a debt based money system, debt must expand to meet the monetary needs of the nation. Hence the inflation targetting by opening up and restricting lending. Yet the last 10 years were quite controlled in terms of inflation. Certainly compared to the previous few decades.

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I'm not convinced the debt was excessive on a macro level. In a debt based money system, debt must expand to meet the monetary needs of the nation. Hence the inflation targetting by opening up and restricting lending. Yet the last 10 years were quite controlled in terms of inflation. Certainly compared to the previous few decades.

The supply of cars, food, electronics and evenmoney was able to expand to meet demand partly due to cheap international labour and technology.

Houses unfortunately where not so elastic and thus we got xxx% inflation in those.

You cannot get your hair done in China = extortionate, Plummer (maybe importeed from Poland = still expensive

Cars cheap, tv silly cheap etc etc

If i was giving advice to a graduate now I would say concentrate on a job that has to be done locally as god knows what new technology will bring.

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If i was giving advice to a graduate now I would say concentrate on a job that has to be done locally as god knows what new technology will bring.

Yes, something that technology is currently unable to outsource. It won't stop managers trying, ala IT or NHS inDirect, but at least there will be some protection. In other words, something that requires face-to-face or hands-on work, that cannot be replaced with telephone / emails. Urgh, does this mean we will be a nation of Primark sales assistants and middle managers?

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The supply of cars, food, electronics and evenmoney was able to expand to meet demand partly due to cheap international labour and technology.

Houses unfortunately where not so elastic and thus we got xxx% inflation in those.

You cannot get your hair done in China = extortionate, Plummer (maybe importeed from Poland = still expensive

Cars cheap, tv silly cheap etc etc

If i was giving advice to a graduate now I would say concentrate on a job that has to be done locally as god knows what new technology will bring.

Good example is I know a nail technician who makes way more than most people with degrees. She has some artistic skill and makes women's nails look sexy. For men, being a skilled physical trade. With computers and servers we also don't need the armies of cubicle drones anymore.

You are right that it was both technology and cheap foreign labour. I don't think either of these trends are going to change soon.

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I don't think a local job will be much protection - although you might get 20 years out of it. Assuming peak oil or some other resource doesn't happen - I reckon telepresencing will be next. Basically your hair will be cut by a robot remotely controlled by someone in a small town in Africa. Ditto plumbing.

Another 10 years after that - the robots will have learnt enough to replace the human in 99% of situations. Google already has cars which can drive themselves.

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LOL peak cheap energy is happening as we speak, the demand / supply curve is astounding, there will be no self-driven cars, only horses and carts! Enjoy it whilst it lasts (MEW like crazy, spend on whores and wine then moan on MSE???).

Edit: Which makes real-world skills / knowledge even more important. E.g. someone who actually knows how to tend crops without using machinery will be vital.

Edited by Cash with Nowhere to Go

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If peak energy starts hitting home - then all bets are off for cheap technology and use of foreign labour though, aren't they?

I guess we are at a crossroads:

Revert to local human labour because of peak energy

Increased globalisation and application of technology

or more likely:

The average person ends up becoming more localised and much poorer in terms of access to technology while the rich become more globalised and use more technology.

Rich/average could apply to entire regions.

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I'm not convinced the debt was excessive on a macro level.

Good thing we don't have to pay interest on it, then.

In a debt based money system, debt must expand to meet the monetary needs of the nation.

"To each according to his needs"

So you're saying HPI was right all along, and should never have stopped.

Hence the inflation targetting by opening up and restricting lending. Yet the last 10 years were quite controlled in terms of inflation. Certainly compared to the previous few decades.

Quite controlled? Um, quite the opposite:

uk-money-supply-growth-dec08-300x170.gif

Sorry, struggling to find a graph that covers more than two years ... this one's full of crap and out-of-date, but the dark blue line shows underlying inflation rose above 10% in 2004 and just went on rising. Consumer prices kept down by chinese imports reflect the chinese economy more than the UK one.

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  • 311 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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