crash2006 Posted July 24, 2008 Share Posted July 24, 2008 It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.The International Monetary Fund has abdicated into schizophrenia. It has upgraded its 2008 world forecast from 3.7pc to 4.1pc growth, whilst warning of a "chance of a global recession". Plainly, the IMF cannot or will not offer any useful insights. Its "mean-reversion" model misses the entire point of this crisis, which is that central banks have pushed debt to fatal levels by holding interest too low for a generation, and now the chickens have come home to roost. True "mean-reversion" would imply debt deflation on such a scale that would, if abrupt, threaten democracy. advertisementThe risk is that these same central banks will commit a fresh error, this time overreacting to the oil spike. The European Central Bank has raised rates, warning of a 1970s wage-price spiral. Fixated on the rear-view mirror, it is not looking through the windscreen. http://www.telegraph.co.uk/money/main.jhtm...1/ccview121.xml Well Mister Ambrose Evans- Pritchard if they read my posts years ago we wouldnt be in the mess were are in, you now know its going to get a lot worse. Quote Link to comment Share on other sites More sharing options...
Injin Posted July 24, 2008 Share Posted July 24, 2008 http://www.telegraph.co.uk/money/main.jhtm...1/ccview121.xmlWell Mister Ambrose Evans- Pritchard if they read my posts years ago we wouldnt be in the mess were are in, you now know its going to get a lot worse. Fair play, top thread title. He's wrong though, we've been doomed to this course for 37 years. A bit of a *******, that. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted July 24, 2008 Share Posted July 24, 2008 we've been doomed to this course for 37 years. When the link between the dollar and gold was broken? Quote Link to comment Share on other sites More sharing options...
Injin Posted July 24, 2008 Share Posted July 24, 2008 When the link between the dollar and gold was broken? More that the US decided to start strongarming the world rather than paying it's bills than anything to do with gold per se, but yes. Quote Link to comment Share on other sites More sharing options...
uptherebels Posted July 24, 2008 Share Posted July 24, 2008 Those comments after the article in the link, are an amazing read !! Quote Link to comment Share on other sites More sharing options...
Radge Posted July 24, 2008 Share Posted July 24, 2008 would imply debt deflation on such a scale that would, if abrupt, threaten democracy. I'm intrigued by the notion that a little financial difficulty should 'threaten democracy'. Though wiser heads than mine have criticised democracy, they have had the wit to realise that it is the least worst option. Other than anarchy, I can't imagine the present financial difficulties switching to any other (lack of / form) of government? Surely even the meanest intellect has given up on the promises of demagogues? Quote Link to comment Share on other sites More sharing options...
Furby Posted July 24, 2008 Share Posted July 24, 2008 I'm intrigued by the notion that a little financial difficulty should 'threaten democracy'. Though wiser heads than mine have criticised democracy, they have had the wit to realise that it is the least worst option.Other than anarchy, I can't imagine the present financial difficulties switching to any other (lack of / form) of government? Surely even the meanest intellect has given up on the promises of demagogues? I can remember reading somewhere on the interwebby thing a quote saying that all democracies will eventually fail due to people voting for loose fiscal policy - they will always vote for whoever puts more money in their pocket, thus encouraging the government to interfere in markets. I remember thinking that it was an interesting idea at the time but was not able to find anything to support it - any ideas anyone? F Quote Link to comment Share on other sites More sharing options...
Injin Posted July 24, 2008 Share Posted July 24, 2008 I can remember reading somewhere on the interwebby thing a quote saying that all democracies will eventually fail due to people voting for loose fiscal policy - they will always vote for whoever puts more money in their pocket, thus encouraging the government to interfere in markets.I remember thinking that it was an interesting idea at the time but was not able to find anything to support it - any ideas anyone? F http://video.google.co.uk/videoplay?docid=...144658400754670 Some references on this video about monetary history. The falls of Greece, Rome, France are all mentioned and briefly outlined. Quote Link to comment Share on other sites More sharing options...
expatowner Posted July 24, 2008 Share Posted July 24, 2008 Those comments after the article in the link, are an amazing read !! I agree and highly recommend reading (at least some of them). Quote Link to comment Share on other sites More sharing options...
symo Posted July 24, 2008 Share Posted July 24, 2008 I thought the point of maximum danger was last Agust just before the FED adopted the moral hazard whole heartedly? Quote Link to comment Share on other sites More sharing options...
stormymonday_2011 Posted July 24, 2008 Share Posted July 24, 2008 (edited) Hardly surprising when some people think the entire US banking system is insolvent http://globaleconomicanalysis.blogspot.com...sound-when.html On edit - WaMu to lead the way http://www.reuters.com/article/bondsNews/i...433366220080724 Edited July 24, 2008 by up2nogood Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.