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RichM

Wishful Non-thinking Won't Stop The Economy Vaporising

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Wishful non-thinking won't stop the economy vaporising

Here's what was happening. Fears that the dotcom bust (or 9/11) might cause a 1929-style Wall Street crash were dispelled as Alan Greenspan pumped low-interest liquidity from the Fed to the markets. American consumption kept growing as asset-price inflation moved from the stock market to the property market. Meanwhile, the possibility of another 1997-style Asian crisis receded as Greenspan's counterparts in Tokyo and Beijing accumulated huge reserves of dollars. The world's financial markets trended smoothly upwards in unison, and down went volatility.
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Nevertheless, as often happens in financial upswings, a variety of fancy theories were formulated to give the appearance of rationality to the wishful non-thinking. A new international monetary system had come into being, we were told, modelled on the post-war Bretton Woods system, in which Asians pegged their currencies to the dollar and enjoyed rapid and risk-free export growth. It was a "stable disequilibrium", others suggested, oxymoronically. The United States wasn't really running a huge deficit; it was exporting some magical "dark matter" not captured by the official statistics.

That's a good summary of where we are now, I reckon. It's a cliche, but we do live in interesting times.

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Guest mattsta1964

Wishful non-thinking won't stop the economy vaporising

...

That's a good summary of where we are now, I reckon. It's a cliche, but we do live in interesting times.

I'm not an expert on economics but the vast deficit situation currently being experienced by the US and UK economies might not be the final nail in the coffin we are expecting. It's a whole lot more complicated than that.

It's interesting that the UK has just repaid all it's debts to pay for WW2 but all the debts run up to fight WW1 are still outstanding. We haven't, as a nation, paid a penny to the US for financing a war we fought 90 years ago. Imagine how big that debt is now .....including compound interest.

I don't think debt alone can be considered as a precursor of a humungus global economic crash. The entire global economy is so abstract, it's virtually impossible to understand how it works, even for people who claim to be experts. I'm a bit drunk now. I better shut the fekk up ;)

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It's interesting that the UK has just repaid all it's debts to pay for WW2 but all the debts run up to fight WW1 are still outstanding. We haven't, as a nation, paid a penny to the US for financing a war we fought 90 years ago. Imagine how big that debt is now .....including compound interest.

Outstanding doesn't mean we haven't paid a penny, like the lend lease loans we've actually paid them back many times over with interest with real currency.

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  • 302 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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