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Are We Reliving The 1930S? - Uk & Us - Forbes Article

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it is spoooky when you see documenaries on the great crash, how eerily similar it all seems (and that's docs made before the current crisis, not ones deliberately made as a comparison)

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There are great similarities, except we now appear to be weaker coming out of the depression than in the 1930's. We may have avoided the very lowest point suffered in the 1930's but if that is because we have massively borrowed and printed to cause the feeble growth, then it will be worse from here. We have no credit left. The world begins to deflate. Our growth falls and borrowing rises even more significantly. This scenario lays bare the fact that our national debt cannot be serviced and bond sales dry up. We are not a manufacturing exporting nation in any sufficient way. We rely on pumping up house prices and consumption. Our balance of payments has been negative for almost all of the last 40 years. We have allowed foreign investment to such an extent that we do not own large parts of the economy and are losing out on Corporation tax since too much of the profit is sent abroad.

Hopefully better growth will overcome this. No guarantees unfortunately. As an exception, I do believe a house price crash would actually be healthy and although disturbing for some, ultimately would lead to renewed vigour in the economy if tied to controlled lending in the residential sector. We also need to control foreign investment in property and tighetn our company takeover code. Then we could encourage the creation of both more banks and enrgy companies. I had better stop....

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Based on that article, it strikes me at how quickly it was all over. It makes me wonder whether we have exchanged a horrific but short depression, for a recession that lingers and festers, dragging down the economy for decades.

People think we've returned back to normal, and yet we still have 300-year low emergency interest rates. Hmm.

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The latest one was just a blip and Mrs Cameron, Osborne, Clegg, Cable and Carney (not to forget Mr (Sir) King) sorted it out in their part time jobs running the country.

Edited by billybong

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There are great similarities, except we now appear to be weaker coming out of the depression than in the 1930's. We may have avoided the very lowest point suffered in the 1930's but if that is because we have massively borrowed and printed to cause the feeble growth, then it will be worse from here. We have no credit left. The world begins to deflate. Our growth falls and borrowing rises even more significantly. This scenario lays bare the fact that our national debt cannot be serviced and bond sales dry up. We are not a manufacturing exporting nation in any sufficient way. We rely on pumping up house prices and consumption. Our balance of payments has been negative for almost all of the last 40 years. We have allowed foreign investment to such an extent that we do not own large parts of the economy and are losing out on Corporation tax since too much of the profit is sent abroad.

Hopefully better growth will overcome this. No guarantees unfortunately. As an exception, I do believe a house price crash would actually be healthy and although disturbing for some, ultimately would lead to renewed vigour in the economy if tied to controlled lending in the residential sector. We also need to control foreign investment in property and tighetn our company takeover code. Then we could encourage the creation of both more banks and enrgy companies. I had better stop....

People with cash need to stop fretting about not getting 5% on their savings, and get ready for the mother of all fire sales.

Could include houses, just a matter of time. Esp if one fancies voting for the Red Eds to hurry it all up.

Whilst having a handy eye on shrinkflation in things we NEED.

This is clearly not advice, but if it was, i'd find a way in 5 years time to prove that it wasn't.

Suit up motherpharquaz...

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So perhaps a new nomenclature is in order. Instead of calling this the “Great Recession,” maybe we should call it the “Long Depression.Paul Krugman, who has often pointed how much worse Europe is doing today than it was in the 1930s coined the term "Lesser Depression" for our post-2007 experience. Brad DeLong, Krugman’s kindred spirit at UC Berkeley, also adopted this expression—until inventing yet punchier ones, like "The Second Great Depression" and "The Greater Depression".

For goodness sake if they can't even agree on a couple of words to describe what has been happening then what hope is there.

Edited by billybong

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Zero inflation, equity markets stuck below previous highs, house prices going nowhere and still below 2007 peak (London excepted)...the only parallel is the 1930s.

Edited by crashmonitor

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Zero inflation, equity markets stuck below previous highs, house prices going nowhere and still below 2007 peak (London excepted)...the only parallel is the 1930s.

How did Britain and the rest of the world get out of this economic malaise at the end of the 30 ?

:ph34r::ph34r::ph34r::ph34r:

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People with cash need to stop fretting about not getting 5% on their savings, and get ready for the mother of all fire sales.

I guess you could think of cash as an investment vehicle with a 5% annual fee and the possibility of significant capital gains. But it still seems quite expensive.

This isn't advice either.

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People with cash need to stop fretting about not getting 5% on their savings, and get ready for the mother of all fire sales.

Could include houses, just a matter of time. Esp if one fancies voting for the Red Eds to hurry it all up.

Whilst having a handy eye on shrinkflation in things we NEED.

This is clearly not advice, but if it was, i'd find a way in 5 years time to prove that it wasn't.

Suit up motherpharquaz...

errr... weve been stuck in that groove for the last decade almost. :(

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How did Britain and the rest of the world get out of this economic malaise at the end of the 30 ?

:ph34r::ph34r::ph34r::ph34r:

I think we all know the answer to that. Has something to do with a man with a silly moustache.

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