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Is Banking Returning To A 'tertiary' Not 'primary' Industry?

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Is banking regressing back to being a 'tertiary' industry as it once was?

An industry there to support the real industries, not be a primary industry in itself?

It would appear so to me with the continual job losses in the industry.

How were things when banking was tertiary? Any antedotal stories.

Cheers.

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My vague recollection of GCSE Business Studies was that primary industries were those like Mining, Farming, Oil exploration etc that took resources from the earth and sold them on. I was of the impression that Banking was always going to be a tertiary industry based on service provision. When was Banking a primary industry and why...?

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My vague recollection of GCSE Business Studies was that primary industries were those like Mining, Farming, Oil exploration etc that took resources from the earth and sold them on. I was of the impression that Banking was always going to be a tertiary industry based on service provision. When was Banking a primary industry and why...?

because bankings, 'services' and retail is all our economy has

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Give him a break, he just has his terminology slightly wrong, its obvious what he means.

My answer is yes, banking is returning to its long run traditional place in the order of things.

The reason they did so well recently is that after the final break with gold convertibility the only possible stable solution for the system was to get to zirp. Inevitably that transition has enriched, temporarily, bankers, as well as holders of certain assets.

Assuming we bob along at zirp now for the long term, then that implies that the extraordinary credit impulse is totally gone, as will be the banks extraordinary profits.

Of course it also implies an end to HPI, and that future asset bubbles are going to be limited in scope relative to what we have witnessed he last 40years.

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My point is pretty obvious:

Banking is now seen as an industry in itself rather than an industry to support 'real' capitalist production.

So the question remains, is it returning to a tertiary sector and a much smaller representation as our nation's GDP or is the banking sector set to remain as a primary focus of the UK economy.

Why did banking move up the chain from tertiary to primary and is the move now back to a supportive role for the real industries or will it somehow remain dominant, primary, call it what you will?

Likewise how was banking back in the 50s, 60s, 70s when its use was to support other sectors?

Thank you.

Edited by ringledman

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Give him a break, he just has his terminology slightly wrong, its obvious what he means.

My answer is yes, banking is returning to its long run traditional place in the order of things.

The reason they did so well recently is that after the final break with gold convertibility the only possible stable solution for the system was to get to zirp. Inevitably that transition has enriched, temporarily, bankers, as well as holders of certain assets.

Assuming we bob along at zirp now for the long term, then that implies that the extraordinary credit impulse is totally gone, as will be the banks extraordinary profits.

Of course it also implies an end to HPI, and that future asset bubbles are going to be limited in scope relative to what we have witnessed he last 40years.

Interesting so you think the removal of the gold standard in 1971 was when it all started to go wrong. I've never pinned a date on it but 40 years seems right.

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Interesting so you think the removal of the gold standard in 1971 was when it all started to go wrong. I've never pinned a date on it but 40 years seems right.

Yes and no. The gold standard had to be dropped, and anyway it had long since been debased by governments basically adding their bonds to the gold money supply for 300 years by the time nixon finally stated the obvious.

However it left the system with a large gap to fill, that is, asset prices and overall debt levels needed to adjust to an equilibrium level appropriate to a pure debt backed currency, which is a level defined by zero base rate and peak debt. That process is what we have observed these last 40 years. Unfortunately we've somewhat overshot so presumably there is more pain to be had until we reach debt levels which can exist at a 0 base rate without additional monetary support.

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Yes and no. The gold standard had to be dropped, and anyway it had long since been debased by governments basically adding their bonds to the gold money supply for 300 years by the time nixon finally stated the obvious.

However it left the system with a large gap to fill, that is, asset prices and overall debt levels needed to adjust to an equilibrium level appropriate to a pure debt backed currency, which is a level defined by zero base rate and peak debt. That process is what we have observed these last 40 years. Unfortunately we've somewhat overshot so presumably there is more pain to be had until we reach debt levels which can exist at a 0 base rate without additional monetary support.

Well......the gold standard had to be dropped if statism was to keep growing.

Now we have reached and gone passed peak parasitism. "Eating the seed corn" is the correct term for what is currently occuring iirc.

The current system will fail, it's runners will die out and then something else will happen. What that is, is impossible to say, but it won't be big government and rentier capitalism.

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The gold standard had to be dropped

Only because it was doing its job and bankrupting states like America which persisted in spending more than they earned.

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My point is pretty obvious:

Banking is now seen as an industry in itself rather than an industry to support 'real' capitalist production.

So the question remains, is it returning to a tertiary sector and a much smaller representation as our nation's GDP or is the banking sector set to remain as a primary focus of the UK economy.

Why did banking move up the chain from tertiary to primary and is the move now back to a supportive role for the real industries or will it somehow remain dominant, primary, call it what you will?

Likewise how was banking back in the 50s, 60s, 70s when its use was to support other sectors?

Thank you.

As someone pointed out, it has always been in the "tertiary sector". I know the point you are trying to make, and yes, it may well fall back to a supporting function. However, banking and financial services have always been a big portion of the UK economy relative to equivalent economies, but in the last few years it definitely grew too big, too quickly. But what will the "real industry" be? We are unlikely to compete by making gadgets or fridge freezers.

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Interesting so you think the removal of the gold standard in 1971 was when it all started to go wrong. I've never pinned a date on it but 40 years seems right.

Could be.

The tendency of Reagan and Thatcher to deregulate in the 1980s shouldn't be overlooked either.

Films like Trading Places (1983), Wall Street (1987) and The Bonfire of the Vanities (1990) rode the zeitgeist of the "trader as hero" meme (or anti-hero in many cases).

Even Del Boy on Only Fools and Horses changed his look to reflect Gordon Gecko.

On TV there were series like Capital City and Chancer (an early role for Clive Owen).

Capital City was a television show produced by Euston Films which focused on the lives of investment bankers in London living and working on the corporate trading floor for the fictional international bank Shane-Longman.

In the 1960s and 70s, those kind of shows would have been about boardroom power struggles, not banking. E.g. The Planemakers or The Brothers. Banking was rather dull (e.g. Captain Mainwaring or Monty Python's "The Dull Life of a City Stockbroker").

http://www.youtube.com/watch?v=FdEVWlnWc7s

Howards' Way in the 80s combined boardroom in-fighting with the aspirational nature of the time. In Howards' Way you could start a successful business at the drop of a hat it seemed.

Of course the 1970s and 80s also saw the decline of traditional industries and the rise of the service sector to fill the gap (sort of).

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  • 285 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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