Gigantic Purple Slug Posted November 13, 2013 Share Posted November 13, 2013 An amazingly prescient piece of work. I wouldn't normally quote all of such a large post,but the OP is what it's all about. I missed the bit where house prices dropped between 67 and 90%. Was that while I was on holiday or something ? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted November 13, 2013 Share Posted November 13, 2013 (edited) I missed the bit where house prices dropped between 67 and 90%. Was that while I was on holiday or something ? I think it's still relevant and fairly precise it's the time scales that are up for debate I feel. This depression/crash aint over by a long chalk. The (other) great depression started in 1930 and lasted till the end of the war. We've only been at it a meagre 6 years. In the GD1 the Americans declared every year the depression was over and every year it got worse...sounds familiar. Edited November 13, 2013 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted November 13, 2013 Share Posted November 13, 2013 I missed the bit where house prices dropped between 67 and 90%. Was that while I was on holiday or something ? :-) I don't think he laid down a timeframe stating at the outset.For a 2007 post,I think it's phenomenal. 'There will be days, weeks,months, even years when things seem to be getting back to "normal", only to fall off a cliff again and catch out the unwary'. Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted November 13, 2013 Share Posted November 13, 2013 We've been sat in our seats for so long that the seat is worn through and our popcorn has gone stale. I remember thinking house prices were out of kilter with average salaries back in 2000. My circle of acqauintance all thought I was a lunatic back then.Most of them still do. The Reformed Broker had a great post the other day about how less rational investors make the most of bubbles.Very true. Quote Link to comment Share on other sites More sharing options...
Oliver Sutton Posted November 13, 2013 Share Posted November 13, 2013 Another lesson from credit bubbles past is that they end in "revulsion" (Kindleberger's term I think). Those whose financial lives have been destroyed by debt will refuse ever to countenance taking it again in their lives, which is fine because there essentially won't be any offered anyway - revulsion happens to those creditors who lost their all too. Was going to start a thread on this. No sign yet of any debt revulsion. No-one's been punished for being in debt, quite the contrary. This cycles got a long way to go yet. We haven't even reached the bust yet. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted November 13, 2013 Share Posted November 13, 2013 Was going to start a thread on this. No sign yet of any debt revulsion. No-one's been punished for being in debt, quite the contrary. This cycles got a long way to go yet. We haven't even reached the bust yet. I disagree, we are in the bust, the Governments are doing all they can to halt its progress. Quote Link to comment Share on other sites More sharing options...
slacker Posted November 13, 2013 Share Posted November 13, 2013 No-one's been punished for being in debt, quite the contrary. Now we have the situation where all central banks are protecting their local markets and waiting for johny foreigner to fail - there is no reason for anyone to prosecute debts - as that risks kicking your own dominos over (Mystery Behind Spanish Banks' Extend-And-Pretend "Bad Debt Miracle" Revealed). Quote Link to comment Share on other sites More sharing options...
oktup Posted December 31, 2013 Share Posted December 31, 2013 Thought I might bump this all-time classic thread with the news that Paul Mason is seemingly working on a book inspired by Kondratieff: http://www.explainyourshelf.com/paul-mason/ Hope all HPCers are keeping well this (K) winter and best wishes for 2014 Quote Link to comment Share on other sites More sharing options...
FallingAwake Posted January 2, 2014 Share Posted January 2, 2014 Thought I might bump this all-time classic thread with the news that Paul Mason is seemingly working on a book inspired by Kondratieff: http://www.explainyourshelf.com/paul-mason/ Hope all HPCers are keeping well this (K) winter and best wishes for 2014 Thanks for bumping this, oktup. I spent several hours yesterday (while recovering from violently throwing up right before New Year) reading all 22 pages of this thread. The original post was written in August 2007 so it was fascinating to read with the benefit of over 6 years of hindsight. It seems to me that, while events moved quickly in 2007-2008, so far governments have scrambled enough to cover over the economic wounds... for now... to the point where large numbers of people think we're effectively "back to normal" (yeah right... with interest rates at 300+ year lows, with national debts edging closer to WW2 levels, and with the Fed still printing tens of billions of dollars a month). I'm still not sure I'm *completely* convinced that cycles can be measured quite so easily and predictably, since they can't necessarily factor in Black Swan events... or maybe they can, and I just have to do more studying on them ...and they surely can't predict with certainty what the governments of the day will do. (Or then again, maybe politicians are simply products of their times. Would Thatcher have done exactly the same as Brown in 2007-2010, for example? I don't know... maybe. Politicians seem to be more reactionary than proactive, so I guess they *are* more predictable in that sense.) However, I accept the general cyclical principle, especially if we think of it more in "generational" terms, and that people sadly don't learn from history all that well, especially if it's "ancient" history like 20 or 30 years ago! That said, I wonder if it's easier to think in terms of BANK cycles... EASY MONEY... TIGHT MONEY... HOOVER UP THE ASSETS... RINSE AND REPEAT. That's what banks seem to be at, ultimately. By the way, I'm new ... but I've been reading this site for a good few years now. Thought it was time to "jump in". Gulp. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted January 2, 2014 Share Posted January 2, 2014 Thanks for bumping this, oktup. I spent several hours yesterday (while recovering from violently throwing up right before New Year) reading all 22 pages of this thread. The original post was written in August 2007 so it was fascinating to read with the benefit of over 6 years of hindsight. It seems to me that, while events moved quickly in 2007-2008, so far governments have scrambled enough to cover over the economic wounds... for now... to the point where large numbers of people think we're effectively "back to normal" (yeah right... with interest rates at 300+ year lows, with national debts edging closer to WW2 levels, and with the Fed still printing tens of billions of dollars a month). I'm still not sure I'm *completely* convinced that cycles can be measured quite so easily and predictably, since they can't necessarily factor in Black Swan events... or maybe they can, and I just have to do more studying on them ...and they surely can't predict with certainty what the governments of the day will do. (Or then again, maybe politicians are simply products of their times. Would Thatcher have done exactly the same as Brown in 2007-2010, for example? I don't know... maybe. Politicians seem to be more reactionary than proactive, so I guess they *are* more predictable in that sense.) However, I accept the general cyclical principle, especially if we think of it more in "generational" terms, and that people sadly don't learn from history all that well, especially if it's "ancient" history like 20 or 30 years ago! That said, I wonder if it's easier to think in terms of BANK cycles... EASY MONEY... TIGHT MONEY... HOOVER UP THE ASSETS... RINSE AND REPEAT. That's what banks seem to be at, ultimately. By the way, I'm new ... but I've been reading this site for a good few years now. Thought it was time to "jump in". Gulp. There has never been "easy money" for the masses like 2001 - 2007 before, and I don`t think there will be again in our lifetimes. Quote Link to comment Share on other sites More sharing options...
long time lurking Posted January 3, 2014 Share Posted January 3, 2014 Was going to start a thread on this. No sign yet of any debt revulsion. No-one's been punished for being in debt, quite the contrary. This cycles got a long way to go yet. We haven't even reached the bust yet. The punishment will start when interest rates rise the revulsion will follow Quote Link to comment Share on other sites More sharing options...
long time lurking Posted January 3, 2014 Share Posted January 3, 2014 even a 33% devaluation was simpy applauded as 'helping our economic performance/exports' whereas in previous times it would have been portrayed as a total disaster Yep,hence the change in direction from an export led recovery to a consumption/debt lead one just the same as the one that got us to where we are now, Can we really keep this going for as long as Japan has ? Quote Link to comment Share on other sites More sharing options...
rantnrave Posted January 3, 2014 Share Posted January 3, 2014 Yep,hence the change in direction from an export led recovery to a consumption/debt lead one just the same as the one that got us to where we are now, Indeed. The coalition has spent the last four years getting things back to the mess they were when they took over in 2010. Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted January 3, 2014 Share Posted January 3, 2014 There has never been "easy money" for the masses like 2001 - 2007 before, and I don`t think there will be again in our lifetimes. I agree that the credit bubble for the general public reached unprecedented levels - However, the government appear to be predicating their economic strategy on the availability of easy money for the masses. Any sign of credit contraction or even stagnation is vigorously met with 'stimulus' measures. And booms and busts due to credit availability are a long established cycle where those with the savvy (typically the financial institutions) do very well out of picking up assets during the phases when the foolish who took on credit to buy assets at near peak prices go bust as credit tightens. Then they dump then again during the next boom, ad infinitum. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted May 14, 2014 Share Posted May 14, 2014 http://www.zerohedge.com/news/2014-05-13/if-economic-cycle-theorists-are-correct-2015-2020-will-be-devastating-us Does the economy move in predictable waves, cycles or patterns? There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States. Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades. Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn. So will the period of 2015 to 2020 turn out to be pure hell for the United States? We will just have to wait and see. One of the most prominent economic cycle theories is known as "the Kondratieff wave". It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them... ... According to Dent, "You need to prepare for that crisis, which will occur between 2014 and 2023, with the worst likely starting in 2014 and continuing off and on into late 2019." So just like the Kondratieff wave, Dent's work indicates that we are going to experience a major economic crisis by the end of this decade. Another economic cycle theory that people are paying more attention to these days is the relationship between sun spot cycles and the stock market. It turns out that market peaks often line up very closely with peaks in sun spot activity. This is a theory that was first popularized by an English economist named William Stanley Jevons. Sun spot activity appears to have peaked in early 2014 and is projected to decline for the rest of the decade. If historical trends hold up, that is a very troubling sign for the stock market. More at the link. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted May 14, 2014 Share Posted May 14, 2014 http://www.housepricecrash.co.uk/forum/index.php?showtopic=182086 http://www.housepricecrash.co.uk/forum/index.php?showtopic=176668 Whilst searching for this thread, there's also these. Mods can they be merged in? Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted May 14, 2014 Share Posted May 14, 2014 Thought I might bump this all-time classic thread with the news that Paul Mason is seemingly working on a book inspired by Kondratieff: http://www.explainyourshelf.com/paul-mason/ Hope all HPCers are keeping well this (K) winter and best wishes for 2014 Isnt there a joke somewhere about 'economists' who write their books after the event theyre covering has happened?! Still, if he gives it a nice pretty neutral cover like that picketty one, it'll look nice on the Notting Hill sets coffee tables and sell well, even if it never actually gets read. Quote Link to comment Share on other sites More sharing options...
Roman Roady Posted May 14, 2014 Share Posted May 14, 2014 My favorite post on the whole forum...still like to readit after all of this time. Quote Link to comment Share on other sites More sharing options...
iamdamosuzuki Posted May 14, 2014 Share Posted May 14, 2014 Amazing OP. Always enjoy rereading it, and also looking at how prescient it was...... this was posted at the same time as Blair and CO were saying no one could have predicted anything. How well I remember getting 10k credit in 2 mins on the internet in 2003, watching everyone on the street remortgage and buy 4x4s within a year ( and my old dad looking worried and asking if we didn't make anything, where was the money coming from?), a mortgage advisor trying to persuade me to take 5X salary, blah blah blah blah. Here we are, 6 years of zirp, dead high streets, zombie banks stumbling along, working conditions eroded, and a useless rentier government hell bent on convincing us a recovery is underway. And right in the middle of it, the horrific London HPB. Jesus H! Quote Link to comment Share on other sites More sharing options...
billybong Posted May 14, 2014 Share Posted May 14, 2014 (edited) So just like the Kondratieff wave, Dent's work indicates that we are going to experience a major economic crisis by the end of this decade It comes quite soon after http:// moneyweek.com/endofbritain/ The government is coming for your money Well that'll make a change - them coming for other people's money that is. There's a moneyweek video about that as well. They'll just print up some more money and there you go - solved. They don't even call the prediction something like the Mayan Apocalypse 2012. Don't the Egyptian hieroglyphics from ancient times have some hidden code of doom by joining up letters on the diagonal or maybe lines just a bit skew whiff from horizontal/vertical or maybe just zig and zag to suit. A bit of the right kind of doomish background music always helps of course. Make of it what you will - maybe it's best for people to just pile into London property. Edited May 14, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 15, 2014 Share Posted May 15, 2014 its not that hard actually...think of overspending with credit this week...you are going to be a bit short next week...unless you dont pay back and roll the debt over with a new loan...following week you are even more short...this goes on till you cant possibly pay the debt and go on living... you hide the fact from the lender, you smile and roll over again..and keep smiling till one day, the money stops. INSTANT bankruptcy... The thing is, if you stopped at the point of inflection, where the debt was just payable, you could maybe trim your costs and work it through. I dont know when that point was reached with the economy, but I suspect it was further back than one might think...1990 maybe? Quote Link to comment Share on other sites More sharing options...
rantnrave Posted May 15, 2014 Share Posted May 15, 2014 Anyone reading this who hasn't read the first post on this thread should do! Quote Link to comment Share on other sites More sharing options...
mmt Posted June 12, 2014 Share Posted June 12, 2014 Mike Maloney mentions K-winter in his latest vid: https://www.hiddensecretsofmoney.com/blog/death-of-the-dollar-update-mike-maloney Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted June 12, 2014 Share Posted June 12, 2014 Anyone reading this who hasn't read the first post on this thread should do! Just read it. Very Peter Schiffy. And he has been wrong on so many points I wouldn't have time to finish. Big picture yes we're toast. IIUC the OP suggested inflation then deflation. Clearly we haven't had the bust yet. I suspect when we do it will be deflation then inflation. Like Japan. But on a shorter time frame. Quote Link to comment Share on other sites More sharing options...
getknk Posted June 13, 2014 Share Posted June 13, 2014 great post by OP. Any new blogs from him? Quote Link to comment Share on other sites More sharing options...
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