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It was only 10 years ago

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I cannot believe it has only been 10 years since the financial crisis, a time when people went into a panic and removed their money from  some banks, where crimes in the city should have led to prosecutions where 100's of people are still doing porridge today, but nobody in law fully understands what bankers do these days, where the UK was rumoured to be at one point hours from a financial meltdown and hardship for millions of people for decades to come.

What amazes me is that the MSM, politicians, bankers will not only set a narritive of a Britain that has in 10 years fought hard and is still fighting hard to repair the damage done back then, but we have gone on to get richer, where we have borrowed more money then pre 2007 and house prices have increased more than the bubble highs of 2007.

Is all now well and all the damaged been fixed?

I DON'T BELIEVE A WORD OF IT

 

http://www.bbc.co.uk/news/business-40869363

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32 minutes ago, wotsthat said:

I cannot believe it has only been 10 years since the financial crisis, a time when people went into a panic and removed their money from  some banks, where crimes in the city should have led to prosecutions where 100's of people are still doing porridge today, but nobody in law fully understands what bankers do these days, where the UK was rumoured to be at one point hours from a financial meltdown and hardship for millions of people for decades to come.

What amazes me is that the MSM, politicians, bankers will not only set a narritive of a Britain that has in 10 years fought hard and is still fighting hard to repair the damage done back then, but we have gone on to get richer, where we have borrowed more money then pre 2007 and house prices have increased more than the bubble highs of 2007.

Is all now well and all the damaged been fixed?

I DON'T BELIEVE A WORD OF IT

 

http://www.bbc.co.uk/news/business-40869363

They talk about 10 years since the crisis started...they dont talk about X years since it ends....I wonder why

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1 hour ago, Roman Roady said:

Time to re post THE best post ever on these "hallowed pages"....from Aug 16 2007, yes its FOFP and "the first snows of a K winter".

 

So its 10 years into the 18 year deflation expected in the post. The central banks pulled out all the stops to keep the debt cycle doing, If this bubble comes to an end quickly we would have an extinction level event for capitalism, governments will fall and riots and shortages would begin.

I wholeheartedly agree that their are magic money tokens, but our established currencies are just one of them too. People covet money because others believe in it and so it is transferable. Once people stop believing in its value, it quickly becomes worthless. cryptocurrencies are an attempt to find other magic money tokens, it doesnt matter which one succeeds but one is all it would take for people to begin. Everyone is trying to find what the next token will be as the writing is on the wall for the USD/EUR/GBP and G10 currencies. Gold and Silver are always an interesting fall back over centuries but who knows in this technological world.

Without credit (i.e debt) the system would collapse, the capitalist monetary system is built on debt that is never paid back i.e government debt. Ever wondered why every country is in perpetual debt and never pays anything back, its because that's how the system works. The only countries that didn't have to conform to this are the oil rich gulf states, but they too have had to issue debt recently as their ballooning budgets were built off the back of $100/barrel oil prices which don't exist anymore. Th

House prices look like they will rise slower than inflation to provide the unthinking masses a higher nominal number but a lower value. But the key thing to realise is every asset is relative to another, value is truly only built on what you need with the "currency" you have. If you're salary had been in "houses" rather than GBP for the last 20 years you would have a lot more GBP. A roof over your head had been taken for granted post world war 2 but that may change as large scale changes come about. I've been truly amazed how the lower middle class and poor have just bent over and taken it. Even corbyn promising bigger bribes than ever couldnt get a majority vote.

 

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Radio Four's "World at One" programme today was devoted in its entirety to this exact subject.  Unfortunately I didn't get to hear all of it but what I did hear could pretty much be summed up as "It was a disaster waiting to happen and the situation at the moment is pretty similar to what it was then".  They were going in quite hard by R4 standards.  

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58 minutes ago, stop_the_craziness said:

Radio Four's "World at One" programme today was devoted in its entirety to this exact subject.  Unfortunately I didn't get to hear all of it but what I did hear could pretty much be summed up as "It was a disaster waiting to happen and the situation at the moment is pretty similar to what it was then".  They were going in quite hard by R4 standards.  

Picking up this same vibe all over too...It feels like The Emperor has no Clothes sort of stage right now and something's going to give.

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11 hours ago, katchytitle said:

"So its 10 years into the 18 year deflation expected in the post."


The deflationary pressure began much earlier than that, as China and India flooded the world with cheap goods.  Instead of allowing a deflation, Gordon Brown opted instead for continued inflation by allowing a (by then defunct) inflation target to be met by the BOE (via successive interest rate cuts).  The net result was a blow-off phase of credit creation.

When the financial crisis hit, the BOE was out of monetary policy ammo and so a deflation started.  To offset this, the government and BOE embarked on a policy of inflating the money supply themselves.

Today, the credit bubble is bigger than ever, as a result of 10 years of reflationary policy - the attempt by government to offset the deflation as identified in FOFP's excellent post.

The deflation will set in eventually.  That point is now very close.  Attempts by policy makers to reflate via wage inflation will not work - this will only accelerate the onset of the UK's looming recession.  We are also at the point where house prices are collapsing under their own weight.  As soon as people start paying down debt in earnest (again identified in FOFP's post), the deflation will be unstoppable.

So we have had reflation, and soon we will get deflation.  Eventually after that, economic conditions will be less determined by private credit generation  - and anyone positioned for a period of high inflation over the coming decades (and thereafter) will be sorely disappointed...

For we HPCers, it will be heaven :D

 

 

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On 8/9/2017 at 9:15 PM, katchytitle said:

If this bubble comes to an end quickly we would have an extinction level event for capitalism, governments will fall and riots and shortages would begin.

It's not capitalism.

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