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Talk Of Depression On Radio4 This Morning

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Guest KingCharles1st

I was talking about this last night- once the price of housing settles back, and the last of the money has been sucked into the financial system as all those who might be able to buy if things were cheaper, have bought, then what next?

There is going to be this weird situation where money is going to suffer huge inflation as the worlds printing presses overheat, but couple with that you wont be able to buy anything like a house unless you are A- a cash buyer, B- somehow able to convince a lender you are a watertight case.

C- a Nulabia politician

Edited by KingCharles1st

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This piece was also from a journalist who last year said we shouldn't talk ourselves into the recession. Apparently talking ourselves into a 30's style depression is OK though :D

Probably because it has already happened, and is now unavoidable :phear:

Edited by symo

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raise interest rates and maintain a strong currency.

I am in all favour of that. Why is this not happening already? What was the interest rate in 1985?

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Unless someone finds some cheap energy source quickly then yes its depression all the way.

No cheap energy out of the ground then no supply of cheap of money.

I think this will end up being the peak production depression.

You really really need to learn what recession means.

It is a *CONTRACTION* of the money supply leading to reduced growth,reduced currncy value and

higher commodity prices.

Your cheap energy source has FOOK all to do with the MONEY CRISIS.

ooops sorry...its peak oil wots dun it. and that man made global warming. thats right now i get it. :blink::blink:

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You really really need to learn what recession means.

Patronising t**t I've lived through one.

It is a *CONTRACTION* of the money supply leading to reduced growth,reduced currncy value and

higher commodity prices.

Try spending your money without using energy.

Your cheap energy source has FOOK all to do with the MONEY CRISIS.

No, but expensive energy is having plenty to do with it.

ooops sorry...its peak oil wots dun it. and that man made global warming. thats right now i get it. :blink::blink:

WTF - who mentioned MMGW I certainly didn't. Why do people like you go off on tangents like this it had nothing to do with my post you make yourself look like an a**e.

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Seeing that it was the liassez faire policies that led to the 1930 great depression, it should be no suprise

that following the same neo liberal policies from Reagan, Thatcher through to Bush and Blair that

has led us to a similar state.

I think it was Freud that said the definition of madness is doing the same thing over and over again

but expecting a different outcome.

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Guest Steve Cook
Unless someone finds some cheap energy source quickly then yes its depression all the way.

No cheap energy out of the ground then no supply of cheap of money.

I think this will end up being the peak production depression.

This is exactly on the button.

The journalist's rule says "follow the money". This rule, however, is not really axiomatic but derivative in that money is really a way of tracking energy.

Money is the symbolic representation of all of the economic activity taking place in an economy. The economic activity, is the work done as a result of the influx of energy into the system. Take the energy away, then less work gets done. The money supply will then re-adjust to accomodate this fact. How does this occur? Defaults on debts leading to destruction of those debts (in other words, destruction of money since debt and money are interchangable terms).

Our governments are trying to inflate the money supply in order to reduce the liklihood/severity of debt defaulting. I believe this will ultimately fail.

energy = economic activity = money

so

Real energy contraction = real econonomic contraction (including a massive HPC) = real money deflation (in the end)

Now, a lot of people argue that inflation will still occur because of rising commodity prices due to rising energy prices. However, this is not inflation in the proper understanding of the term. It has nothing to do with the fiat money supply. No, this is a decrease of supply of the commodity in question (carbon fossil fuel...most notably, oil), leading to an increase in the price (good old fashioned supply and demand). I guess I am being pedantic here, and so don't really care what this is called. It's just important to know the difference.

Steve

Edited by Steve Cook

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Guest Steve Cook
What can we do to escape depression?

Find a new source of cheap energy to replace oil, a new source of many of the minerals to provide the raw materials for our consumer products. Oh, and did I mention, a new planet to replace the one whose biosphere is being irreparably damaged due to our continuously rising population

I'm sure I forgot something........

Edited by Steve Cook

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Lending out trillions of dollars to people to buy houses based on the idea that they will only increase in value was always going to end in disaster - regardless of what's going on in the energy markets.

I would say this is mainly a monetary, rather than an energy crisis.

In fact, in many ways, the food and energy shortages that are about to hit are largely due to the malinvestment cause by loose monetary policy and by Gov't interventions in the free market.

Windfall taxes on oil companies was never going encourage investment in new facilities. The regulators turning a blind eye to the likes of Tesco paying farmers at BELOW COST was bound to end in increasing numbers of farmers throwing in the towel.

These are the types of basic infrastructure that capital SHOULD have been invested in over the last decade - but it wasn't because people were too busy using their 'capital' to flip condos.

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Seeing that it was the liassez faire policies that led to the 1930 great depression, it should be no suprise

that following the same neo liberal policies from Reagan, Thatcher through to Bush and Blair that

has led us to a similar state.

I think it was Freud that said the definition of madness is doing the same thing over and over again

but expecting a different outcome.

The complete opposite actually

It was unprecedented Gov't and CB intervention in Americas money markets that cause the great depression. Congress (+Woodrow Wilson) created the Federal Reserve in 1913, incase you hadn't noticed.

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This is exactly on the button.

The journalist's rule says "follow the money". This rule, however, is not really axiomatic but derivative in that money is really a way of tracking energy.

Money is the symbolic representation of all of the economic activity taking place in an economy. The economic activity, is the work done as a result of the influx of energy into the system. Take the energy away, then less work gets done. The money supply will then re-adjust to accomodate this fact. How does this occur? Defaults on debts leading to destruction of those debts (in other words, destruction of money since debt and money are interchangable terms).

BINGO this topic is so important IMO.

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Guest Steve Cook
Lending out trillions of dollars to people to buy houses based on the idea that they will only increase in value was always going to end in disaster - regardless of what's going on in the energy markets.

I can well see why it appears to be a monetary crisis independant of the energy supply. Lending money into existence would, all other things being equal, lead to inflation. However, when an economy is growing, such lending can really be seen as borrowing from the future; the future growth of an economy; which is itself, dependant on the energy supply. As long as we have perpetual economic growth, such new money is eventually given a home. If an economy stops growing (never mind contracts!), then there is a whole load of money that has been lent today, that suddenly has nowhere to go to tommorow. This would ordinarily lead to inflation. Not as a result of printing/lending more money out. Rather, merely as a result of the same amount of money existing in a world where there is less of an economic home for it to go to (supply and demand again). Rather tidily, this is (in principle) resolved by a contraction of the money supply due to defaults on debt. Unless, that is, we get Central Banks trying to pump more money into the sytem.

At this point, my economic understanding of outcomes gets vague....(I should say that I am more than happy to concede that my understanding may simply be wrong; vague or otherwise)

Except to say this. As a consequence of inflating the money supply, money becomes debased in value as a kind of economically self regulating mechansism such that the supply demand fractional ratio between the money and the commodities it is exchanged for remains the same.

Steve

Edited by Steve Cook

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Guest grumpy-old-man

anyone who even mentioned 'depression' on here was ridiculed by the majority last year.......

now I hear them discussing it on sky news tonight.

It will be a depression, but on a western world scale. :ph34r:

they have staved it off for another week I see, with the predicted 75 point drop. <_<

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Guest Steve Cook
...It will be a depression, but on a western world scale...

I agree

I wish I didn't

The good will suffer along with the bad....

Edited by Steve Cook

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I can well see why it appears to be a monetary crisis independant of the energy supply. Lending money into existence would, all other things being equal, lead to inflation. However, when an economy is growing, such lending can really be seen as borrowing from the future; the future growth of an economy; which is itself, dependant on the energy supply. As long as we have perpetual economic growth, such new money is eventually given a home. If an economy stops growing (never mind contracts!), then there is a whole load of money that has been lent today, that suddenly has nowhere to go to tommorow. This would ordinarily lead to inflation. Not as a result of printing/lending more money out. Rather, merely as a result of the same amount of money existing in a world where there is less of an economic home for it to go to (supply and demand again). Rather tidily, this is (in principle) resolved by a contraction of the money supply due to defaults on debt. Unless, that is, we get Central Banks trying to pump more money into the sytem.

At this point, my economic understanding of outcomes gets vague....

Except to say this. As a consequence of inflating the money supply, money becomes debased in value as a kind of economically self regulating mechansism such that the supply demand fractional ratio between the money and the commodities it is exchanged for remains the same.

Steve

As far as I can make out - the monetary policy, fiscal policy and burdensome regulations in the UK have constricted the economy so much that I don't even believe that it is possible for the economy grow - even if oil dropped to $50/barrel.

Gov't spending is now 48% of GDP once you include the bailouts (or at least the ones we know about). It's sickening to see so much wealth being squandered. Nobody/Nothing is able to trash an economy quite as well as a Gov't can!

The value of fiat is partly dependent on the quantity in circulation and the expexted value of future tax receipts.. Whilst I agree with you that fiat is fvcked in a contracting economy, I think that this current upheavel would have happened anyway (due to Gov't & CB intervention), without the 'help' of the energy issues.

Clearly I have much more faith than you in our Gov't's ability to fvck over our economy without any outside help :D:D:D

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Guest Steve Cook
As far as I can make out - the monetary policy, fiscal policy and burdensome regulations in the UK have constricted the economy so much that I don't even believe that it is possible for the economy grow - even if oil dropped to $50/barrel.

Gov't spending is now 48% of GDP once you include the bailouts (or at least the ones we know about). It's sickening to see so much wealth being squandered. Nobody/Nothing is able to trash an economy quite as well as a Gov't can!

The value of fiat is partly dependent on the quantity in circulation and the expexted value of future tax receipts.. Whilst I agree with you that fiat is fvcked in a contracting economy, I think that this current upheavel would have happened anyway (due to Gov't & CB intervention), without the 'help' of the energy issues.

Clearly I have much more faith than you in our Gov't's ability to fvck over our economy without any outside help :D:D:D

I freely admit I get quite wobbly in my reasoning (and knowledge) when it comes to macro fiscal matters....I'm going to have a long hard think about what you have said here....until my head hurts....... so, not that long then....:lol:

Steve

Edited by Steve Cook

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I can well see why it appears to be a monetary crisis independant of the energy supply. Lending money into existence would, all other things being equal, lead to inflation. However, when an economy is growing, such lending can really be seen as borrowing from the future; the future growth of an economy; which is itself, dependant on the energy supply. As long as we have perpetual economic growth, such new money is eventually given a home. If an economy stops growing (never mind contracts!), then there is a whole load of money that has been lent today, that suddenly has nowhere to go to tommorow. This would ordinarily lead to inflation. Not as a result of printing/lending more money out. Rather, merely as a result of the same amount of money existing in a world where there is less of an economic home for it to go to (supply and demand again). Rather tidily, this is (in principle) resolved by a contraction of the money supply due to defaults on debt. Unless, that is, we get Central Banks trying to pump more money into the sytem.

At this point, my economic understanding of outcomes gets vague....(I should say that I am more than happy to concede that my understanding may simply be wrong; vague or otherwise)

Except to say this. As a consequence of inflating the money supply, money becomes debased in value as a kind of economically self regulating mechansism such that the supply demand fractional ratio between the money and the commodities it is exchanged for remains the same.

Steve

for an absolute fooks sake.

Peak oil is not here.

The inflation of the money supply here and in the usa is the cause of the currnt crisis.

In fact you may trace it back to August 15, 1971 and the ending of the bretton woods agreement.

Yje only thingenergy has to do with the current crisis is that the presses plug into the national grid.

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  • 293 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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