What can be done to prevent another bubble

[JollyRedGiant]

Fairly good analysis there Jolly but your over egging saying that Herr Marx predicted the Great Crash of 2008!

Marx predicted the nature of globalisation and its consequences.

BTW we had terrible times here in the 1980s but that didn't produce a Socialist Government.

Economic recession does not necessarily produce a socialist revolution. The left in Ireland (and elsewhere) suffered setbacks because of the capitulation of the social democracy to neo-liberalism and the collapse of Stalinism. This coming period will see the emergence of genuine working class organisations (as has begun to happen in parts of Latin American and in its embryonic stage in some European countries).

Though I think most commentators from the Left through to the Right realise this one coming is going to be the biggest storm in decades....

Up until quite recently practically every neo-liberal economist was singing the 'never ending song'

It is too late now to avoid Global Recession - the best we can hope for is a short one and that it doesn't tip over into a Global Meltdown that leads to another Great Depression.

Probably too late for that also - and even if the world economy was to escape with a short recession it would only be a short respite before another down-turn would emerge. The days of boom are over - for the next considerable period we are facing a recessionary cycle with only short-term periods of minor growth.

Indeed the serious danger now facing the world economy is one of potential stagflation - stagnant economic growth with inflationary pressures. Food prices could well begin to rise rapidly in the short term - given reports that credit guarantees given by the banks to cover food exports are now no longer available - grain already has already begun to pile up in ports in many parts of the world and other staples like rice, coffe, tea and meat and poultry could well be next.

[Catalpa]

Marx predicted the nature of globalisation and its consequences.


Economic recession does not necessarily produce a socialist revolution. The left in Ireland (and elsewhere) suffered setbacks because of the capitulation of the social democracy to neo-liberalism and the collapse of Stalinism. This coming period will see the emergence of genuine working class organisations (as has begun to happen in parts of Latin American and in its embryonic stage in some European countries).


Up until quite recently practically every neo-liberal economist was singing the 'never ending song'


Probably too late for that also - and even if the world economy was to escape with a short recession it would only be a short respite before another down-turn would emerge. The days of boom are over - for the next considerable period we are facing a recessionary cycle with only short-term periods of minor growth.

Indeed the serious danger now facing the world economy is one of potential stagflation - stagnant economic growth with inflationary pressures. Food prices could well begin to rise rapidly in the short term - given reports that credit guarantees given by the banks to cover food exports are now no longer available - grain already has already begun to pile up in ports in many parts of the world and other staples like rice, coffe, tea and meat and poultry could well be next.

'the serious danger now facing the world economy is one of potential stagflation - stagnant economic growth with inflationary pressures. Food prices could well begin to rise rapidly in the short term - given reports that credit guarantees given by the banks to cover food exports are now no longer available - grain already has already begun to pile up in ports in many parts of the world and other staples like rice, coffe, tea and meat and poultry could well be next.'

My line of thinking too - if the food distribution network breaks down then we could be facing effective food shortages.

And could really blow the lid off....

[euroboy]

Yeah why exempt property tax on the primary residences.


Alot of people are talking of negative equity, but really if people view their homes in terms of shelter, then it negative equity shouldnt really affect them, the value of their houses should not affect them.

Ah but that is the real con, isnt it.

People saw their 'homes' as vehicles to make big money, having shelter was just a side benefit.

[Retrolives]

20000Miles is correct. Cheap credit caused the boom. Interest rates should be determined from savings, not from the artificial manipulation of a central bank. We have to get out of the fiat Euro and return to sound money like gold and silver. FA Hayek won the Nobel Prize for proving to the world that Central Banks cause the 'Boom-Bust' cycle. If we ever want to live in peace and bring an end to financial misery we must abolish the central bank.

Central Banking is the CAUSE of the financial crisis. Everything else is secondary.
Central planning is leading our society down the road to hell.

[Irish Liberty Forum]

Irresponsible lending caused the crack. It was not planned centrally. It was facilitated by the neo-liberal allergy to regulation (especially financial regulation).

The criminal repackaging of dodgy loans into derivatives and the gullibility of banks that bought such rubbish spread the trouble around a bit, but irresponsible lending was the cause.

You might not be going far back along the chain - you need to consider WHY there was so much irresponsible lending.

PS: monopolised money supplies, fixed interest rates, legal tender laws, etc: these are examples of financial and monetary regulation.

[Retrolives]

You are confusing the effect with the cause.

If the government tells banks they can legally keep 10% of their deposits under a guarantee of state intervention should confidence in the banking system fail, ALL BANKS WILL LOWER THEIR RESERVES TO 10%.

Governments have consistently lowered reserve requirements for banks over the last number of decades under these very terms.

In a free market banks would have 100% reserves and there would be no boom-bust cycle. Marx wanted central banks in his manifesto. I'm guessing he's laughing in hell right now.

If you want to return to the stone age go right ahead but I'm getting out of the Euro as fast as I can before it goes Weimar. Money must be derived in the marketplace otherwise it is doomed to failure.

Read 'Human Action' by Ludwig Von Mises or 'Man Economy and State' by Murray Rothbard. The world will open up before you. They are free to download online. Type it into google.

[Irish Liberty Forum]

You have a few steps to go in your argument to provide anything that's even remotely credible.

Read retrolives. We are untangling cause and effect.

[Irish Liberty Forum]

Try and sell it to me. May I suggest a quick precis for a start?

I'd love to try and sell it to you, perhaps over a beer or if I had some time to write you something now. Unfortunately, though, I have to go to bed. I hope you will check out some literature in the meantime, e.g.

What Has Government Done to Our Money? (Rothbard)
Austrian Theory of the Trade Cycle (Mises, Hayek, et al)

Many other works I would like to recommend, but these are excellent.

[southwestkerry]

The only way to copper-fasten the country and prevent another bubble is by having a near totalitarian head off government.
Some hope we have off that!!!!

[20000miles]

There's a lot of literature out there. Your recommendations don't look all that attractive (I've some experience at this reading radical left-wing literature, some of it is better than others, and I like to think I've developed a nose for telling the difference).

Why don't they look attractive?

Try the One Minute Case for the Austrian Business Cycle Theory for a quick rundown of how central banks cause booms and busts.