Boom and bust.

[mentalboy]

Following on from the recent glut on financials dominating the Politics board...
Way back in the last century when I were a lad and the Iron Lady ruled the country with an iron fist I happened to take a class in Economics, which if I'd actually bothered to work at would have resulted in a better grade of something long forgotten called an 'O' level.

Something I recall from those long lost years was the 'seven year cycle' which, like 'O' levels and Maggie, was claimed to have been ended - by a financial wizard going the name of Gordon Brown. Economists back in my days at school would spout on about economical cycles and that you could have seven years of growth before a crash.
Mr Brown and his cronies may have thought that the boom/bust years were behind us for good and then, wallop, 2008 brings the whole house of cards to the floor.

Five minutes on youtube and you'll find plenty of doom-mongers quoting everything from the Bible to Nixon as 'evidence' of the next crash and how Eastern nations are gobbling up gold preparing, presumably, for the end of the Dollar as the global financial standard.

So, my question is, have we indeed seen the end of the seven year cycle or do you think 2015 will be another year that sees stock markets tumbling? Should I be buying more quartz and shirt buttons to hide under the bed (can't afford gold ), are we all doomed and will any of those bloody gangs ever live up to their reputations and kill that prat Ross Kemp?
BCF decides....
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[-]

I reckon if the Tories stay in, we'll bumble along as we are now, with slight improvement for a few more years. If Labour get in, I see us going back to massive overspending again, which whilst it will look rosy in the short term, could end up crippling the country in the long run.

It seems a pattern which has been going on for decades, Labour borrow like mad, until the debt becomes a serious problem, the Tories then get their turn to make cuts and bring public spending down, before Labour promise to spend more again and get back in.... and repeat.
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[swampy]

[mentalboy]

[arry]

[-]

[N cee thirty]

Construction industry and manufacturing is flat out atm, helped along by cheap fuel and no rises in fuel duty for haulage, something labour might fuck up, especially with all these unfunded giveaways they have recently announced and everyone will have to pay for it.
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Jewlio Iglesias wrote: I actually did vote BNP once

[swampy]

[Ste]

Option 5: Russell Brand.

[swampy]

[Lord Percy]

Don't they say the 'bust' part of the cycle is what's gonna get worse each time?

I was too young to know about how things went in the 90s, but certainly the one in 2008 was fairly gigantic. How many countries went down the pan - Portugal, Greece, Ireland, Spain, etc?

What were the other recessions like? Were they also continental in size???

I think I'll need to live through another economic downturn before I can have much idea. Maybe that'll be 2015 ?

[Polarbear]

If we have a 'bust', I dread to think what will happen with people and huge mortgages this time round.

There were so many foreclosures last time, and from what I remember form then, a lot of affordable housing that was repossessed was bought by the 'to let' people, taking them out of the market place permanently.

I can't see it being any better this time round.
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[kernow24]

we will go along quite contently for a few years, propped up by an over inflated housing market, then the real bust will come.

the one that should have came before but the government in all their wisdom done everything they could to prop up banks and the housing market.

they should have just let the banks fail and gone through the following crap until society got back on its feet, instead they've been papering over the cracks, when the whole wall is crumbling below.

When the next bust comes, and it will, the 'recession' we've not long had will seem like a stroll in the park.

[The Shaggy D.A.]

[Tungtvann]

Me too, I'm saving my monies until then.

[Ste]

Your ponds will be useless, bitcoin will rise as the new king!

[Tungtvann]

[The Shaggy D.A.]

I'll fill the rooms to the rafters with students, then can pay me in bitcoins.

https://americanhistoryrules.wikispaces.com/file/view/rod_brown_middle_passage_art.jpg/47644113/rod_brown_middle_passage_art.jpg
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[Tracey Suntan-King]

I studied economics around the same time as Mentalboy and have always kept an interest in global economics although very much at amateur level.

When we were doing our studies the world was very different and the economic theories we were taught made (a sort) of sense based on what had happened in the past. Since the eighties quite a lot has changed (no shit?), the factors that led to the big world crash in 2008 included a number of things that, combined, were a perfect storm, including,

Technology, which makes the speed of transactions unimaginable 25 years ago and means that trends, sometimes only read by computer algorithms can develop faster than humans can think, or intervene. So a single transaction can trigger other transactions and before anyone notices, there's a new trend.

Borrowing, the trend for business and government to be sustained by borrowing. Companies and the like have always had to borrow to fund commitments but the global appetite for borrowing (and lending) reached new heights.

Overvaluation of debt/credit, treating debtors as an asset (previously an accounting convention not a business strategy)

Reliance on inflation/growth to repay and devalue debt.

And finally, the sheer size of numbers being traded/managed, being too huge for the human mind to contemplate.

There has also been a recognition in economics theory that human behaviour, not just money determine the success or failure of national economies (again, no shit?).

So basically the old theories are screwed, no one knows. Ask 100 economics professors what's coming, will give 100 different answers.

The reality is, that whatever happens nationally (and globally) some of us will boom, some of us will bust. Most financial reporting is based on crude averages which conceal the fact that each household's circumstances are different. However over several years, the effects are "smoothed".

TL:DR No one knows.
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[swampy]

[mentalboy]

[Kickstart]

[Rogerborg]

[oldpink]

part of the problem is the price inequality in housing
the "London" property market is way over priced for the standard of housing
£250,000 in London may get you a 1 bedroom flat in a decent area
£250,000 will get you a decent sized house / garden / garage anywhere else
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[mentalboy]