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I See Speculative Bubbles Like In 2007

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http://www.fuw.ch/article/i-see-speculative-bubbles-like-in-2007/

William R. White, the former chief economist of the Bank for International Settlements, warns of grave adverse effects of the ultra loose monetary policy.

William White is worried. The former chief economist of the Bank for International Settlements is highly sceptical of the ultra loose monetary policy that most central banks are still pursuing. «It all feels like 2007, with equity markets overvalued and spreads in the bond markets extremely thin», he warns.

Mr. White, all the major central banks have been running expansive monetary policies for more than five years now. Have you ever experienced anything like this?

The honest truth is no one has ever seen anything like this. Not even during the Great Depression in the Thirties has monetary policy been this loose. And if you look at the details of what these central banks are doing, it’s all very experimental. They are making it up as they go along. I am very worried about any kind of policies that have that nature.

But didn’t the extreme circumstances after the collapse of Lehman Brothers warrant these extreme measures?

Yes, absolutely. After Lehman, many markets just seized up. Central bankers rightly tried to maintain the basic functioning of the system. That was good crisis management. But in my career I have always distinguished between crisis prevention, crisis management, and crisis resolution. Today, the Fed still acts as if it was in crisis management. But we’re six years past that. They are essentially doing more than what they did right in the beginning. There is something fundamentally wrong with that. Plus, the Fed has moved to a completely different motivation. From the attempt to get the markets going again, they suddenly and explicitly started to inflate asset prices again. The aim is to make people feel richer, make them spend more, and have it all trickle down to get the economy going again. Frankly, I don’t think it works, and I think this is extremely dangerous.

There is no tickle down, it's all a con to ensure the money floods upwards. The rich have got richer and the poor poorer. For those that control the system this is a great result.

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Was there ever any empirical data to support trickledown?- I don't think there was.

Economics is pure shite as far a I can see- yet people are still getting paid to be economists? :blink:

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Problem for the CBs is the politicians have simply refused to take responsibility.

Obama can't get anything past the nutters, took Osborne 3 years to hit the plan 'B' button, Germany are making things worse every day in the EZ, wheels are coming off in China etc etc.

FED's been the only thing between a depression and probably all out war and war is starting to look more likely by the day now on Europe's eastern borders.

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Problem for the CBs is the politicians have simply refused to take responsibility.

Obama can't get anything past the nutters, took Osborne 3 years to hit the plan 'B' button, Germany are making things worse every day in the EZ, wheels are coming off in China etc etc.

FED's been the only thing between a depression and probably all out war and war is starting to look more likely by the day now on Europe's eastern borders.

I always thought I was a nutter predicting war....welcome to the mad house \!!!

Edited by TheCountOfNowhere

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Problem for the CBs is the politicians have simply refused to take responsibility.

Obama can't get anything past the nutters, took Osborne 3 years to hit the plan 'B' button, Germany are making things worse every day in the EZ, wheels are coming off in China etc etc.

FED's been the only thing between a depression and probably all out war and war is starting to look more likely by the day now on Europe's eastern borders.

But the Fed is/was the principal villain. If Greenspew had let the air out of the first dotcom bubble in 1997 we wouldn't have had a 2nd Great Depression ten years later. Similarly, if the BoJ had let unemployment rise in the mid 90s rather than undertaking a succession of doomed 'Keynesian' interventions the Japanese economy wouldn't be on the verge of a sovereign debt default.

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I always thought I was a nutter predicting war....welcome to the mad house \!!!

Russian tanks could be driving down Wall Street and the Fed will still be pumping stocks to new highs.

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Problem for the CBs is the politicians have simply refused to take responsibility.

Obama can't get anything past the nutters, took Osborne 3 years to hit the plan 'B' button, Germany are making things worse every day in the EZ, wheels are coming off in China etc etc.

FED's been the only thing between a depression and probably all out war and war is starting to look more likely by the day now on Europe's eastern borders.

You'd

Better

Buy

Some

Gold

Then

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Was there ever any empirical data to support trickledown?- I don't think there was.

Economics is pure shite as far a I can see- yet people are still getting paid to be economists? :blink:

Trickle-down was only ever an excuse for unparalleled greed. It only appeared to work because it became a popular saying during deregulation, peak-oil and the great British sell-offs.

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http://www.fuw.ch/article/i-see-speculative-bubbles-like-in-2007/

There is no tickle down, it's all a con to ensure the money floods upwards. The rich have got richer and the poor poorer. For those that control the system this is a great result.

There certainly has been a trickle-down effect in London - only lately it's turned into more of a flood. I mean of course the barmy house prices of more prime/central/fashionable London rippling out even into the likes of Tooting and Colliers Wood. And that is the sole extent of trickle-down, as far as I can see.

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Was there ever any empirical data to support trickledown?- I don't think there was.

Economics is pure shite as far a I can see- yet people are still getting paid to be economists? :blink:

You are wrong, there is a huge amount of empirical work trying to explain the (undeniable) observed correlation between house price increases and consumption.

http://www.nber.org/papers/w11534

http://rfs.oxfordjournals.org/content/23/6/2229.short

http://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2010.tb00552.x/abstract

http://www.ifs.org.uk/publications/6803

http://www.sciencedirect.com/science/article/pii/S0165176511005763

It is difficult to directly estimate the causal impact of house prices on propensity to consume because there are a lot of confounding variables - house price increases are strongly correlated with consumption increases, but that doesnt automatically imply there is a causal link (it could be that a growing economy affects both house prices and consumption). That is why more subtle identification strategies are needed, see above papers for examples. Afaik its still a somewhat open question, at least in the UK.

Edited by Smyth

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There certainly has been a trickle-down effect in London - only lately it's turned into more of a flood. I mean of course the barmy house prices of more prime/central/fashionable London rippling out even into the likes of Tooting and Colliers Wood. And that is the sole extent of trickle-down, as far as I can see.

I think either you or I have a slight misunderstanding of trickle down....I didnt think it was supposed to be a ponzi of assets revalued by new entrants and speculation.

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You are wrong, there is a huge amount of empirical work trying to explain the (undeniable) correlation between house price increases and consumption.

http://www.nber.org/papers/w11534

http://rfs.oxfordjournals.org/content/23/6/2229.short

http://onlinelibrary.wiley.com/doi/10.1111/j.1542-4774.2010.tb00552.x/abstract

http://www.ifs.org.uk/publications/6803

http://www.sciencedirect.com/science/article/pii/S0165176511005763

It is difficult to estimate the causal impact of house prices on propensity to consume because there are a lot of confounding variables - house price increases are strongly correlated with consumption increases, but that doesnt automatically imply there is a causal link (it could be that a growing economy affects both house prices and consumption). That is why more subtle identification strategies are needed, see above papers for examples.

Analyse it anyway you like, but the fact remains that this government has inflated Labour's house price bubble for short term political gain. When in opposition, they criticised Labour for the house price bubble. Now, when it suits them, they deny that it ever existed. That is the reason I shall be voting UKIP at the next election.

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Analyse it anyway you like, but the fact remains that this government has inflated Labour's house price bubble for short term political gain. When in opposition, they criticised Labour for the house price bubble. Now, when it suits them, they deny that it ever existed. That is the reason I shall be voting UKIP at the next election.

I thought about UKIP but their housing people are awful. They need to sack the Nimbys and BTL element.

So Green party for me (land value tax). Other policies I don't care about anywhere near as much as LVT.

LVT could be a policy for any of the parties (perhaps not tories, was Winston Churchill Liberal when he supported it?).

Perhaps the best way to get it implemented is by supporting a 'fringe' party for a single policy.

Then there's an incentive for another, more electable, party to try to take the votes by having the same policy.

Random results of some searching:-

http://greenparty.org.uk/news/government-housing-initiative-all-fluff-and-no-substance.html - 2011

http://camden.greenparty.org.uk/news/130214-crumbs-for-london.html - 2014

http://greenparty.org.uk/news/2013/11/12/london-assembly-member,-darren-johnson,-on-housing/ -2013

Mostly London related.

Better UKIP than other parties, but I think they've been captured by BTL parasites.

Bruce, imagine the effect of you supporting Greens - at least some people would ask you why (in a shocked voice?)!

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I thought about UKIP but their housing people are awful. They need to sack the Nimbys and BTL element.

So Green party for me (land value tax). Other policies I don't care about anywhere near as much as LVT.

LVT could be a policy for any of the parties (perhaps not tories, was Winston Churchill Liberal when he supported it?).

Perhaps the best way to get it implemented is by supporting a 'fringe' party for a single policy.

Then there's an incentive for another, more electable, party to try to take the votes by having the same policy.

Random results of some searching:-

http://greenparty.org.uk/news/government-housing-initiative-all-fluff-and-no-substance.html - 2011

http://camden.greenparty.org.uk/news/130214-crumbs-for-london.html - 2014

http://greenparty.org.uk/news/2013/11/12/london-assembly-member,-darren-johnson,-on-housing/ -2013

Mostly London related.

Better UKIP than other parties, but I think they've been captured by BTL parasites.

Bruce, imagine the effect of you supporting Greens - at least some people would ask you why (in a shocked voice?)!

The main parties seem to perceive UKIP as the main threat to their careers and since they expend considerable resources to ascertain these things, I'll stick with UKIP.

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I thought about UKIP but their housing people are awful. They need to sack the Nimbys and BTL element.

So Green party for me (land value tax). Other policies I don't care about anywhere near as much as LVT.

LVT could be a policy for any of the parties (perhaps not tories, was Winston Churchill Liberal when he supported it?).

Perhaps the best way to get it implemented is by supporting a 'fringe' party for a single policy.

Then there's an incentive for another, more electable, party to try to take the votes by having the same policy.

Random results of some searching:-

http://greenparty.or...-substance.html - 2011

http://camden.greenp...for-london.html - 2014

http://greenparty.or...on,-on-housing/ -2013

Mostly London related.

Better UKIP than other parties, but I think they've been captured by BTL parasites.

Bruce, imagine the effect of you supporting Greens - at least some people would ask you why (in a shocked voice?)!

The Dems and Labourites will introduce a Mansion Tax if they get the opportunity, a roundabout attack on property speculation and a step in the right direction towards an LVT.

OTH UKIP represents the only serious challenge to mass immigration, the rentiers other dependency. Any kind of presence in Westminster would make the current open door policy more difficult for the other parties to sustain.

Edited by zugzwang

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