tag:blogger.com,1999:blog-7820485130017459619.post3973502363866794886..comments2023-10-24T01:46:47.151-07:00Comments on CynicusEconomicus: The Use of the Expression 'Sterling Crisis' Increases Day by DayUnknownnoreply@blogger.comBlogger42125tag:blogger.com,1999:blog-7820485130017459619.post-79932299957528510922010-03-24T13:09:57.458-07:002010-03-24T13:09:57.458-07:00Interesting article and discussion.
Thought I sho...Interesting article and discussion.<br /><br />Thought I should bring this to the attention of those who may not have seen it already, as it fits into the discussion about government debt.<br /><br />According to the following blog entry, the debt of the united states seems to have hit a point of saturation. <br /><br />http://economicedge.blogspot.com/2010/03/most-important-chart-of-century.html<br /><br />The question of just how much debt a system can take is an interesting one. Maybe governments can take on large debts under some circumstances as Lord Keynes pointed out, but when debt piles upon debt for decades surely there has to be a point where it has to give. <br /><br />Maybe the chart in the blog is giving a misleading impression, maybe there are other factors at play that nullify it, but my gut, and many other things I have read mean I do not think you can dismiss government debt as easily as Lord Keynes does.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-77924087087117768032010-03-24T12:39:58.313-07:002010-03-24T12:39:58.313-07:00In short we're talking about a potentially sha...In short we're talking about a potentially sharp decline in the general quality of living. It could mean more time with loved ones. It could also mean the return of things like famine. <br /><br />What I'm trying to say is that there's a price to pay for anything. Small towns and close-knit communites come with drawbacksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-5408170468387083892010-03-24T12:22:20.230-07:002010-03-24T12:22:20.230-07:00The problem is we don't like each other all th...The problem is we don't like each other all that much unless some of us agree on the same religion or something. Consumption is the only uniting experience that a multicultural society such as ours truely share and bond over. Take the Ipods away and we'll be just like people in rural parts of the developing world, or in a white trash trailer park in the United States, where three generations share a very small living space, with with little to no ambition on the part of the young people.<br /><br /><br />As for love and friendship, those things are either very easy or hard to come by depending on the individual person's temperment and situation. Most interpersonal consumption is an attempt to buy loyalty , likeability,desire from other people.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-55475129319781914782010-03-22T09:59:15.818-07:002010-03-22T09:59:15.818-07:00Its clear we have driven off a cliff, isn't it...Its clear we have driven off a cliff, isn't it. What scares me is that people are trying to apply some kind of logic that rule of law and morality actually exists in this country. It does not, not in any way. Letting other people run critical systems on your behalf is always asking for trouble. The majority didn't care, here is what you get.<br /><br />Lets be honest about this, what do human beings really need? Love, friendship, clean air, clean water and healthy food. The list goes on, a warm dry shelter, and plenty of firewood or hemp stalks to cook your food and heat your water. Do we need ipods, exchange traded funds, X factor to fulfil the above? No.<br /><br />I guess we were the first industrialists, and probably will be the first to go down, as we have forgotten in our frenzy that nature controls our destiny, but we can always utilise it to fulfil our needs if we choose to do so in a reasonable way.<br /><br />This system cannot react quickly enough to the real issue, oil production decline. There are strong competitiors for the resource, who weren't around when we were lording it a hundred years ago. We have spent our wealth on....what? Do we seriously expect to build wind turbines and nuclear power plants if we are broke? Can a homeless person build a dream home without any income?<br /><br />We have got to get back to basics. Grow our own food and wealth in a sustainable way. SHARE. It could be an amazing time, if we can let go of those essentials such as KFC, Iphones and those other devices that are so clearly critical to human existence.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-18723536111178375392010-03-22T03:41:26.804-07:002010-03-22T03:41:26.804-07:00...In terms of predictions, I have vague memories ......In terms of predictions, I have vague memories of dire warnings in early 2007, I guess by Mish and other blogs. I had to move house at that time anyway, but sold up and moved into rented - but did not have the knowledge to foresee the Sterling crash. Ho Hum.<br />Anyway - more predictions are here:<br />http://www.ft.com/cms/s/0/4b980f64-3510-11df-9cfb-00144feabdc0.html<br />See the charts showing the budget deficit - is it me or does anyone else think that the 2007 boom was the peak of taxable 'earnings' and will not be beaten in the short term / (ever)? The graphs show govt. revenue is expected to beat that in 2014 by £100bn.<br />These figures are inflation adjusted as well!<br />Not only that but due to the 'perpetual motion' machine that is the UK, where government spending is 1/2 of GDP, tax take will reduce by at least 1/2 the amount that govt. spending is cut by.<br />All in all I think these predictions are the most optimistic I've seen.Unknownhttps://www.blogger.com/profile/06608926469432567123noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-88959560593901770052010-03-22T02:42:51.838-07:002010-03-22T02:42:51.838-07:00Sorry LK I am on the road at the moment and the in...Sorry LK I am on the road at the moment and the internet is not always available.<br /><br />Rockwell and ron paul both and others many times stated that FF represented real systemic risk, as for back as 1999, when the CRA was revised.<br /><br />Going back even further Greenspan himself wrote about property bubbles in 1977 and how they come about, but by 2002 he had forgot.<br /><br />once again looking at things as objectively as I can (see Keeting who I do not share a political affiliation with) the Austrian business cycle best describes the events of 2000-2008, but what comes next is up for grabs but at the end of the day a recession is a price adjustment downwards and no amount of mathematical tricks changes that, Gravity always gets you.<br /><br />I also think with respect you confuse regulation with governance. Browns ideological stupidity of removing the risk management of banks to the FSA is a good case in point. If you believe in Fiat Money and FRB than its quite obvious even now that the BOE who balance the economic equation out with printing money are the only people this responsibility should lay with. <br /><br />Here is a question, If we are lucky UK debt might stabilise at around 80% of GDP and we get growth of around 1 and 3/4 a year, how many years will it take to a figure of around say 33% or one third gdp?<br /><br />Mr Keen can believe what he wants, at the end of the day its not a football match, its a battle of ideas or in this case models, or the lack off as with the Austrians.Seanhttps://www.blogger.com/profile/04362169593902131947noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-14841935629349192202010-03-21T22:16:23.462-07:002010-03-21T22:16:23.462-07:00Another great article by Galbraith:
http://www.gu...Another great article by Galbraith:<br /><br />http://www.guardian.co.uk/commentisfree/2009/mar/27/g20-globalrecessionLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-71643730544813897722010-03-21T22:13:15.029-07:002010-03-21T22:13:15.029-07:00James Galbraith explains how US banks can be clean...<b>James Galbraith explains how US banks can be cleaned up by simple and standard regulation:</b><br /><br /><a href="http://www.youtube.com/watch?v=qHc5NaaZvrc" rel="nofollow">Economist James Galbraith on bank stress tests - 07 May 09</a>.<br /><br />When a bank is trouble and is at risk of being insolvent – and even <b>before</b> it becomes insolvent – it must accept inspection by a team of regulators who audit it. If they find that it is at risk of insolvency, the regulators have to power to re-organise the bank and fire the management.<br /><br />They have the legal power to take the banks into a “pass-through receivership” and wipe out the equity and subordinated debt - while protecting depositors.<br /><br />The is no legal issue with taking the banks’ other debts onto the government’s books, because any bank that has signed onto deposit insurance with the Federal Deposit Insurance Corporation has already legally agreed to these conditions.<br /><br />If large banks require very large bailouts of depositors, the government can nationalise them and become the majority share holder – thereby earning the bank’s profits to pay back taxpayers and selling its shares back to the private market and making an additional profit.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-64513723840984027812010-03-20T19:25:25.273-07:002010-03-20T19:25:25.273-07:00Reply to Sean 2
Also, Dean Baker predicted the re...<b>Reply to Sean 2</b><br /><br />Also, Dean Baker predicted the real estate buble an crisis in 2002:<br /><br /><i>Basing his outlook on house-price data-sets produced by the US government and Yale economist Robert Shiller, Baker was among the first economists to assert there was a bubble in the US housing market in 2002, well before its peak in late 2005 and one of the few economists to predict that the collapse of this bubble would lead to recession</i><br /><br />http://en.wikipedia.org/wiki/Dean_Baker<br /><br />Michael Hudson predicted it in 2006:<br /><br />http://en.wikipedia.org/wiki/Michael_Hudson_(economist)Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-38490584088581798472010-03-20T19:05:00.443-07:002010-03-20T19:05:00.443-07:00Reply to Sean
As a interested observer I award th...<b>Reply to Sean</b><br /><br /><i>As a interested observer I award the prize to the Austrians, the earliest predictor i would say was Lew Rockwell </i><br /><br />When did he predict it? You have links to back this up?<br /><br /><i>Steve Keen is an interesting one, more Schumpeter than anything else I would say.</i><br /><br />Dead wrong, Steve Keen is a well known post Keyensian:<br /><br /><i>Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. He identifies as post-Keynesian, criticizing both modern neoclassical economics and (some of) Marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include Hyman Minsky [a post Keynesian], Piero Sraffa [related to early Keynesian] and Joseph Alois Schumpeter.</i><br /><br /><a href="http://en.wikipedia.org/wiki/Steve_Keen" rel="nofollow">Steve Keen</a><br /><br />Just because he was <b>influenced</b> by Schumpeter, it doesn’t make him a neo-classical economist or a follower of Schumpeter. Schumpeter <a href="http://en.wikipedia.org/wiki/Joseph_Schumpeter" rel="nofollow">was a classical liberal who rejected Keynesianism (see under “2.3 Schumpeter and Keynesianism”)</a>.<br /><br />Moreover, Steve Keen predicted <a href="http://www.debtdeflation.com/blogs/about/" rel="nofollow">the Global Financial Crisis as long ago as December 2005 (see under “Biography”)</a>.<br /><br /><i>LK, Japan has had 15 plus years of deflation economics which we are trying now, And it has not worked, in fact they have helped exported their problems to us.</i><br /><br />I think you are rather confused. Keynesians don’t advocate “deflation economics”.<br /><br />Japan suffered a severe financial crisis in 1992. The Japanese took forever to fix their zombie banks.<br /><br />In 1995, the government passed a large stimulus package and they got strong growth in 1996.<br /><br />But in 1996-1997, the Japanese government tried to balance its budget, and in 1997 the government raised its consumption tax from 3 to 5 percent – a disastrous move, which had nothing to do with Keynesianism.<br /><br />The economy plunged into recession again, as any Keynesian could have predicted.<br /><br />They returned to fiscal stimulus in 1998 and started to fix their banks, and by the early 2000s returned to growth - proving taht fiscal policy works. They suffered the 2001-2003 recession, but all countries did.<br /><br />They didn’t get deflation until 1999, but got out of it by the end of 2006.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-90229633725584878532010-03-20T11:14:30.091-07:002010-03-20T11:14:30.091-07:00no LK
Your list is not good enough, plenty of peo...no LK<br /><br />Your list is not good enough, plenty of people had understood the fall that was coming in or around the end of 2007, what I am interested in, is before then and from your list I can only in 2 cases down for that period. As a interested observer I award the prize to the Austrians, the earliest predictor i would say was Lew Rockwell but strangley enough it was an Aussie politico former PM Paul Keting who was very critical of the current US treasurer head Timothy Geithner, when Geithner put together a solution to the Asian congregation in 1998, which lead to the build up of US debt held by China.<br /><br />Steve Keen is an interesting one, more Schumpeter than anything else I would say.<br /><br />LK, Japan has had 15 plus years of deflation economics which we are trying now, And it has not worked, in fact they have helped exported their problems to us.Seanhttps://www.blogger.com/profile/04362169593902131947noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-18916208465593101142010-03-20T01:08:27.628-07:002010-03-20T01:08:27.628-07:00Intereesting article :-
http://fxmarketanalysis....Intereesting article :-<br /><br /><br />http://fxmarketanalysis.wordpress.com/2010/03/19/the-eu-debt-crisis-two-minute-dummies-summary-how-to-profit/coshbrewnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-58558156456404992892010-03-18T22:17:49.986-07:002010-03-18T22:17:49.986-07:00Also see Selgin, George, “Should We Let Banks Crea...Also see Selgin, George, “Should We Let Banks Create Money?” <i>Independent Review</i> 5.1 (Summer, 2000): 93-100:<br /><br /><i>In a recent twist on the [fractional reserve]... fraud argument, Hans-Hermann Hoppe and his co-authors (1998) argue that holders of fiduciary media are, in fact, not victims of bank fraud at all but co-conspirators who assist bankers' fraudulent undertakings by misrepresenting themselves "as the owners of a quantity of property that they do not own and that plainly does not exist" (21-22). Apart from begging the question of who are the victims, <b>this novel fraud argument is based on a simple failure to recognize that redeemable banknotes and deposit credits are not "titles," as Hoppe and his co-authors claim. They are instead IOUs, so there is nothing inherently fraudulent about there being more of them in existence at any moment than the total stock of what they promise to deliver.</b> (If all IOUs had to represent existing property in order to be nonfraudulent, most loan transactions would be fraudulent.) A person who deposits gold in a bank in exchange for a redeemable banknote does not retain ownership of the gold, but instead gives it up, albeit for an indefinite period of time. (I return to this issue later.) The bank, in issuing IOUs against itself, is not analogous to a counterfeiter, as Hoppe and his co-authors claim, for the simple reason that the bank acknowledges its own debts, whereas a counterfeiter issues IOUs with someone else's name on them.</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-5486580773933067122010-03-18T21:55:25.723-07:002010-03-18T21:55:25.723-07:00More on fractional reserve banking:
Rozeff, Micha...<b>More on fractional reserve banking:</b><br /><br />Rozeff, Michael S., “Rothbard on Fractional Reserve Banking: A Critique,” <i>Independent Review</i> 14.4 (Spring, 2010): 497-512.<br /><br />Rozeff shows that Rothbard's and other Austrians' view of fractional reserve banking as fraudulent is wrong.<br /><br />Rractional reserve banking is totally consistent with free markets:<br /><br /><i>Rothbard’s firm belief that fractional-reserve banking constitutes fraud [to him] rules out fractional-reserve free banking even in a free market. This position, I argue, <b>goes against basic ideas of liberty and the free market,</b> both of which Rothbard champions. When he regards fractional-reserve banking as fraudulent and proposes its illegality, he introduces his own ethical judgment based on his own assessment of the merits of any and all exchange transactions that may occur between banker and depositor. He introduces his own idea of the appropriate property rights in a bank deposit, his own idea of what appropriate money must be, and his own idea of libertarian law. Although he is entitled to his opinions, the market participants in a condition of liberty in free markets decide all these matters for themselves, and their reasoning and valuations may differ from Rothbard’s. <b>They may not regard fractional-reserve banking as fraudulent, and they may want to transact via fractional-reserve banking arrangements.</b> They may wish to circulate media of exchange that are someone else’s liabilities.</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-19547864820232142482010-03-17T16:48:05.782-07:002010-03-17T16:48:05.782-07:00This is a fascinating article http://www.theatlant...This is a fascinating article http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/2/? <br /><br />which seems to back up - in some cases at least - what Lord Keynes is saying. The author worked for the IMF for many years and he says that the one thing that always marked out emerging economies was the free market methods used and the cronyism between government and the countries oligarchs. He says that the only way for the crisis to be contained is for the oligarchs to take a hit - but the government and powers that be are scared to do that so they make the rest of the populace take the hit. Despite knowing that this policy will never work. <br /><br />His bold claim is that ever since Reagan the US has operated on the same level as many corrupt, emerging economies. And the oligarchs have taken over the running of the government - for their own ends. The oligarchs in question are of course this time based in Financial Services. <br /><br />I have to say that Lord Keys is right too that the US had the most sustained period of growth in its entire history from the period 1945 to 1970. It does seem to indicate that the economic system used then served that country fairly well. I would say that things started to go wrong when governments moved towards more monetarist policies in the mid seventies. <br /><br />For those who think the free market is the answer - look at history. In times of free market excess the results have always been crises, depressions and war. During the 1920's productivity shot up but the benefits were concentrated at the top. Real wages stagnated and debt bubbles grew. Those in very senior positions however saw their renumeration and wealth rise massively. The wealthiest saw taxes cut by a huge amount. Inequality stretched to obscene levels. We all know the results of this and it is echoed by what has happened over the last decade. <br /><br />In fact it could be argued that the free marketeers were in sway throughout the start of the last century - and many nations never really had a 'roaring twenties' anyway. The UK had many problems in the twenties and before then had faced possible revolution in the lead up to the first world war conditions were so bad for many. In Europe Germany was suffering hyper inflation and turning to fascism.<br /><br />'Free' markets, liberalism, neoliberalism, laissez faire - call it what you will - always seems to end in tears. Yet we never seem to learn.<br />PCC.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-51603912031117238552010-03-17T14:02:37.106-07:002010-03-17T14:02:37.106-07:00Fractional reserve banking has several authors and...Fractional reserve banking has several authors and many admirers. Therefore, it's difficult to see when the affair with it began. Some say America fell in love with it when Nixon wanted to finance Vietnam while preserving the welfare state. Others say that it was the bankers who became taken with it in the 1980s. Woodward suggested America was betrothen with it all along.Perhaps, he's right. Maybe we've always been a buy now, pay later kind of people.A Real Black Personhttp://www.arealblackperson.cnnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-83558371306826962502010-03-17T13:53:00.759-07:002010-03-17T13:53:00.759-07:00@ Lord Keys
I think there's something off abo...@ Lord Keys<br /> I think there's something off about that book. His premise is that money backed by gold would cause the money supply to increase too slowly for capitalism to be viable, and that economic growth is based on debt creation. If that is so, then how can you be apposed to financial deregulation? Quite a paradox, if you ask me.<br /><br />By Woodward's definition of the Federal Reserve, it is totally correct in manipulating interest rates to get people to buy homes they can't afford because there is no consequence. Debt is healthy and in a healthy economy there is "plenty of it".<br /><br /> By Lord Keys, definition of the Federal Reserve, it can do whatever it wants when it wants to. It can borrow whatever it wants because its debt isn't like other debt. Continuous printing money doesn't devalue currency and even through some inconceivable way, the United States devalues or rolls over its debt, it doesn't matter even though the United States promised it wouldn't devalue or roll over our debt. So there's nothing to fret over.* All we need to do is more or less de-globalalize finance (That will be areal easy task. All the gov will do is just put a firewall on the entire internet to prevent financial transactions. That way, no money leaves the country.)and the developed world's economic problems will come to a grinding halt.<br /><br /><br /><br /><br />*The reason why people are worried about public debt is that the maturation time on bonds has been shortened.A Real Black Personhttp://www.arealblackperson.comnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-78590937109089862642010-03-15T21:54:55.787-07:002010-03-15T21:54:55.787-07:00More on Fractional reserve banking
From 1836 unti...<b>More on Fractional reserve banking</b><br /><br />From 1836 until 1913, the US had no central bank, yet fractional reserve banking was the norm:<br /><br /><a href="http://books.google.co.nz/books?id=8W2LEYUC_LkC&pg=PA90&dq=%22fractional+reserve+banking+was+the+norm%22&cd=1#v=onepage&q=&f=false" rel="nofollow">Federal Reserve System: background, analyses and bibliography</a><br /><br />In reality, fractional reserve banking was a major invention of the free market.<br /><br />What government ever forced banks or the public to engage in the practice?<br /><br />The only way to end it, even in the 18th or 19th centuries, would have been by government intervention.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-82633570037634839042010-03-15T17:01:55.513-07:002010-03-15T17:01:55.513-07:00If Lord Keynes wants to return to the post 1945 pr...If Lord Keynes wants to return to the post 1945 pre 1980 financial system, that all fine and dandy. <br /><br />But as so much of our entire GDP now seems to depend on people buying stuff they don't really need, with money they don't have (ie credit), or buying property with increasingly large sums of borrowed cash, it suggests to me that a lot of people would be considerably poorer as a result. <br /><br />Don't get me wrong, I don't agree with the easy credit, have it now, pay later philosophy. But I think you may find it a hard sell to todays younger people who have never had to live under a system where consumer credit was rationed and mortages were only available after years of saving and proving the reliability of your salary and career.sobersnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-73423698822021459252010-03-15T16:23:02.433-07:002010-03-15T16:23:02.433-07:00Low interest rates lead to bad investments, they m...<i>Low interest rates lead to bad investments, they make us lazy, fiat money and fractional reserve banking are at the centre of the storm.</i><br /><br />In a well regulated financial system that prevents bubbles and separates commercial from investment banking, low interest rates increases credit to productive businesses and borrowers, increasing real economic growth. The proof of this is in the higher growth rates from 1945 down to the 1970s.<br /><br />I have to laugh every time Austrians complain about fractional reserve banking. It has always been a <b>fundamental characteristic of modern Western capitalism</b>.<br />The mythical world of 100% reserve banking has never existed - if it did it would probably cause growth to become so slow that economcies would stagnate.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-17185268012767709372010-03-15T16:14:05.289-07:002010-03-15T16:14:05.289-07:00Reply to Sean 2
The issue of the prediction of th...<b>Reply to Sean 2</b><br /><br />The issue of the prediction of the crisis is an important one<br /><br />As it happens, post Keynesian economists did predict the current crisis!<br /><br />They have an outstanding track record.<br /><br />There are 11 prominent economists who predicted the crash:<br /><br />Dean Baker,US<br />Wynne Godley, UK<br />Fred Harrison, UK<br />Michael Hudson, US<br />Eric Janszen, US<br />Steve Keen, Australia<br />Jakob Brochner Madsen and Jens Kjaer Sorenson, Denmark<br />Kurt Richebacher, US<br />Nouriel Roubini, US<br />Peter Schiff, US<br />Robert Shiller, US.<br /><br /><a href="http://econospeak.blogspot.com/2009/08/did-heterodox-economists-do-better-at.html" rel="nofollow">Did Heterodox Economists Do Better At "Calling It" Than Mainstream Ones?</a> <br /><br />Now of these 5 are Post Keynesian (Baker, Godley, Hudson, Keen, Sorenson), and 1 a combination of an Austrian and Post Keynesian (Janszen). <br /><br />That is to say, over half of them were post-Keynesians.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-75355919379213586992010-03-15T10:09:25.508-07:002010-03-15T10:09:25.508-07:00K, Your evidence always seems to confirm your ideo...K, Your evidence always seems to confirm your ideological biases, this seems to me to be the big problem in economics, very few from all schools predicted it, but it must be said it was those from or near to the Austrian school that had in the main but not exclusively a far better track record.<br /><br />Your second big mistake is to mistake things that make things worse with things that cause things to happen. and indeed the other way around, things that make things better ect.<br />(see your post war analysis)<br /><br />Low interest rates lead to bad investments, they make us lazy, fiat money and fractional reserve banking are at the centre of the storm. No I am not an Gold Standard man btw.Seanhttps://www.blogger.com/profile/04362169593902131947noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-41618078343512567502010-03-15T07:20:06.815-07:002010-03-15T07:20:06.815-07:00Having been asking for your thoughts for a while n...Having been asking for your thoughts for a while now I would love to read your speculative post.Jonnyhttps://www.blogger.com/profile/16119442844302447926noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-71251808897952899082010-03-15T06:49:21.616-07:002010-03-15T06:49:21.616-07:00Hi Cynicus,
Firstly thanks for writing such a...Hi Cynicus,<br /><br /> Firstly thanks for writing such an excellent blog, I've been following it for about a year and a half now and you always seem to provide a picture that is far more clear and honest than most of our media or politicians.<br /><br /> I've never commented here before but found this news snippet on sky 'Biggest lender urges overpaying on mortgages', <br /><br />http://news.sky.com/skynews/Home/Business/Lloyds-Bank-Urges-Customers-To-Overpay-On-Their-Mortgage-Payments-Amid-Low-Interest-Rates/Article/201003315573929?lpos=Business_Second_Home_Page_Article_Teaser_Region_4&lid=ARTICLE_15573929_Lloyds_Bank_Urges_Customers_To_Overpay_On_Their_Mortgage_Payments_Amid_Low_Interest_Rates<br /><br /> In all honesty I've never heard of a bank suggesting people over pay more likely they want people to take out bigger loans.<br /><br /> If I were being just a little cynical here I would think that maybe the banks are suspecting a big jump in interest rates in the near future and do not want to be blamed when they have to start repossessing large number of houses. Just a thought!<br /><br /> However maybe the really scary thing is I know people who see low interest rates as a way of decreasing monthly repayments for their interest only mortgages. To increase current spending, I can only despair! (I think partly the reason for this is that they have such large mortgages £150,000+ they see no realistic way of ever paying it off so are having a good time today and will put off the hard decisions until later or until forced to... maybe a little like the whole country? ) <br /><br /> Lets hope when the financial Tsunami does hit the UK it's not as bad as we all fear it could be.<br /><br />Cheers for now,<br /><br />Paul MAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-32336392348846550142010-03-15T01:57:42.327-07:002010-03-15T01:57:42.327-07:00Just because the mainstream moves towards your vie...Just because the mainstream moves towards your view means nothing really. Most mainstream commentators including economists don't know their onions. Countries with sovereign currencies such as UK & US (see Japan also) have no risk of default or bankruptcy. EMU/Euro countries unfortunately do have these risks. Tory proposals for austerity will be disastrous in the short AND long term. The UK SHOULD be running a deficit focussed on priorities to boost growth and allow some private saving to run down private debt.Anonymousnoreply@blogger.com