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    Senior Member Survive & Stay Free's Avatar
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    Default Business cycles views

    What do you think of business cycles? Boom and bust? Are they inevitable or avoidable? Can the negative consequences be mitigated? If they can be should they be?

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    They're currently engineered

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    Away with the fairies Southern Kross's Avatar
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    The more I learn about financial systems the more the world's economy looks like one giant ponzi scheme. Basically, overall there is more debt than there are actual finances to support it - so for this reason, I think boom and crippling bust is inevitable.

    And from the little I understand, it seems unavoidable.
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    Quote Originally Posted by Tantive View Post
    They're currently engineered
    Tell me more.

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    Quote Originally Posted by Southern Kross View Post
    The more I learn about financial systems the more the world's economy looks like one giant ponzi scheme. Basically, overall there is more debt than there are actual finances to support it - so for this reason, I think boom and crippling bust is inevitable.

    And from the little I understand, it seems unavoidable.
    Hmm, what way is debt operating in your understanding?

    I watched something earlier which suggested there is a fundamental contradiction in the economy that efforts to repress wages, which dont have to be anything recent, could be a legacy of destorying unions in the seventies and eighties for instance, results in workers not having disposable income to sustain demand in the economy which causes a breakdown.

    The market produced its won fix in the form of credit cards, which then spawned loans, mortgages, subprime. The economy has only been as good as its latest fix in that perspective and eventually debts get called in. Unless you're "too big to fail" and no doubt certain decisions were made and, in all likelihood could be made again, in the knowledge bail outs are an option.

    On the other hand the pace of innovation and designed obsolescence, seasonal demands, cost plus pricing and sales pricing would suggest that business itself has sought to try and even out demand so its not all peeks and troughs. Then again that's retailing, not finance or investment.

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    Away with the fairies Southern Kross's Avatar
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    Quote Originally Posted by Lark View Post
    Hmm, what way is debt operating in your understanding?

    I watched something earlier which suggested there is a fundamental contradiction in the economy that efforts to repress wages, which dont have to be anything recent, could be a legacy of destorying unions in the seventies and eighties for instance, results in workers not having disposable income to sustain demand in the economy which causes a breakdown.

    The market produced its won fix in the form of credit cards, which then spawned loans, mortgages, subprime. The economy has only been as good as its latest fix in that perspective and eventually debts get called in. Unless you're "too big to fail" and no doubt certain decisions were made and, in all likelihood could be made again, in the knowledge bail outs are an option.

    On the other hand the pace of innovation and designed obsolescence, seasonal demands, cost plus pricing and sales pricing would suggest that business itself has sought to try and even out demand so its not all peeks and troughs. Then again that's retailing, not finance or investment.
    Pretty much this. But it even goes beyond the workers living beyond their means; businesses, the banks and financial companies do too, either through loans and mortgages or investments. Basically all the collective assets and capital in the world doesn't cover the total amount at risk. The economy has come to depend on this imaginary money but people don't realise this. It's only when something goes wrong in the market and everyone starts call in their loans on one another, people realise that a large amount of that money doesn't exist. But the thing is, it hasn't simply been shifted into someone else's pocket; it never existed anywhere for anyone.

    Of course, I know it's more complicated than that (I accept my knowledge of economics is limited) but overall this seems to be the way it works.
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