Wall Street fears for next Great Depression

biffvernon · Post by **biffvernon** » 17 Mar 2008, 11:33

Definitely no dig here - unlike the banking system which seems to be digging ever deeper holes:

The Bank of England on Monday made an extra ?5bn ($10bn) available for banks to borrow.

Andy Hunt · Post by **Andy Hunt** » 17 Mar 2008, 11:39

biffvernon wrote:Definitely no dig here - unlike the banking system which seems to be digging ever deeper holes:

The Bank of England on Monday made an extra ?5bn ($10bn) available for banks to borrow.
more

Sheesh - banks never seemed to be that keen whenever I was lacking liquidity . . .

RenewableCandy · Post by **RenewableCandy** » 17 Mar 2008, 11:51

Andy Hunt wrote:
biffvernon wrote:Definitely no dig here - unlike the banking system which seems to be digging ever deeper holes:

The Bank of England on Monday made an extra ?5bn ($10bn) available for banks to borrow.
more
Sheesh - banks never seemed to be that keen whenever I was lacking liquidity . . .

Kind of ironic really when you consider what an excellent investment it is powering a house with renewables...

Smithy · Post by **Smithy** » 17 Mar 2008, 21:06

MacG wrote:
snow hope wrote:
Haggis wrote: How did America get over the last depression? Don't say prozac...
The had a war - it was called WWII
And they had a massive EXPANSION in all respects. Extracted more oil and minerals, built more cars and roads, more houses, shops, offices and factories.

All this expansion of everything was done with money created from nothing, and then lent out at interest. As long as the expansion of the physical manifestations and expansion of oil and mineral extraction was larger than the average real interest charged, everything was just fine.

As soon as we hit some kind of PeakOil in 2005, the physical expansion stopped and people suddenly had problems paying interest on their loans. There was no expansion to borrow more money against.

The only way forward for the existing system now is pure financial expansion - create more and more money in order to be able to pay interest on the old loans. This will of course lead to inflation, but EVERYBODY in charge will promote this solution. It's the only solution they know.

On a very speculative note, if the US is kicked from the world economy, there will probably be oil for continued expansion in eastern Europe and BRIC for another 10-15 years. Maybe 20 years if we have a five year recession first.

Regarding the creation of money and financial expansion: http://www.bullnotbull.com/archive/billions.html

Editor's note: This piece is an internet classic, outlining the terrible flaws in our current banking system, and how it enriches bankers and powers-that-be at the expense of common people like us. If you have never seen it, you are in for an eye opener! If you have read it before, read it again - it is well worth it.

RenewableCandy · Post by **RenewableCandy** » 17 Mar 2008, 21:14

All good stuff except for

Wives are working in unprecedented numbers

For heaven's sake why do so many people have a problem with this?? French people have been living like this, with great grace and style, since the 18th century and they live longer than USA people or us...

I mean, what else are we supposed to do all day? Flower-arranging? Baby every year??
[/rant]

Post by **adam2** » 18 Mar 2008, 08:28

Papillon wrote:What, already? This is rather quicker than I anticipated. PO has hardly even started! I mean, we're still on that fecking plateau, aren't we?

Anyhows, if it starts now, then I'd like to wish everyone on these forums a Happy Great Depression, may we all meet on the other side of it alive and well, good luck with those tomatoes and potatoes in the garden, and take it easy on the moonshine

Although PO has no doubt played a part in the current financial crises, I feel that it is a small part.
IMHO the main cause has been unwise lending of money to both individuals and corporations who are unable to return it.
To invest or gamble with money that one owns is acceptable, possibly even prudent, however to borrow large sums in order to invest in assets, on the assumption the said assetts will invetibly increase in price is clearly unwise.
After all, a serious deppresion started in 1929 without any help from peak oil.

SunnyJim · Post by **SunnyJim** » 18 Mar 2008, 08:47

I'm not so sure.

How has oil usage changed since 2000? What has happened to oil prices since 2000? Meanwhile the banks and financial institutions have had to lend more and more to grow the economy so that interest can continue to be paid and the old credit worthiness is maintained. This has lead to a growth of money supply while the underlying economy hasn't grown (because of increasing oil costs and static supply). If we had been able to buy and use increasing amounts of cheap oil the economy may have kept up.....

So the two are linked. Lending has only been irresponisble because our economy has been restricted in growth due to lack of availiable cheap energy.

I get the feeling that growth in this country has really tailed off. We've made most of the efficiency gains. We travel about as much as we can. We've got the whole population working, we work about as many hours as possible, we've got as much red tape (creates work) as we can handle etc etc. The illusion of growth is maintained by ever increasing booms and busts. Ever bigger bubbles......

Vortex · Post by **Vortex** » 18 Mar 2008, 08:53

SunnyJim · Post by **SunnyJim** » 18 Mar 2008, 09:25

Sorry Vortex, that's going to need some explanation!

biffvernon · Post by **biffvernon** » 18 Mar 2008, 11:03

"Dad says the bank's gone bust and you've got to get a job, mum. Here's your hat and coat."

Aurora · Post by **Aurora** » 18 Mar 2008, 11:23

biffvernon wrote:"Dad says the bank's gone bust and you've got to get a job, mum. Here's your hat and coat."

RenewableCandy · Post by **RenewableCandy** » 18 Mar 2008, 12:01

There are far too many hats in that picture. Mum's obviously using the millinary as a cover for a more, erm, lucrative line of work, while the family think she's been flower-arranging all day.

Hmm not quite my style, but popular in cultures where women are discouraged from working n'est-ce pas?

MacG · Post by **MacG** » 18 Mar 2008, 12:03

Smithy wrote:Regarding the creation of money and financial expansion: http://www.bullnotbull.com/archive/billions.html
Editor's note: This piece is an internet classic, outlining the terrible flaws in our current banking system, and how it enriches bankers and powers-that-be at the expense of common people like us. If you have never seen it, you are in for an eye opener! If you have read it before, read it again - it is well worth it.
Many valid points of criticism on that page, but I think we are forgetting one thing: The current system was probably unavoidable!

As soon as the conditions for growth and expansion is there, SOMEONE will take the opportunity to get more stuff. Most people happen to LIKE stuff, and want more and more of it. Something to do with dopamine and serotonine I guess, and quite unavoidable. The lack of stuff was cited as a major reason for the Berlin wall to be torn down.

A wise decision would have been to freeze consumption on the level of the 1930's, but people would have hated every minute of it if another example had been visible. It would have been IMPOSSIBLE to keep people at the level of Romania if a German consumption level had been possible.

The current monetary system made a stunning job with helping us to increased consumption, and most people enjoyed every minute of it.

Aurora · Post by **Aurora** » 18 Mar 2008, 12:03

Vortex wrote:

"Look mum, I managed to buy some crude oil this morning".

RenewableCandy · Post by **RenewableCandy** » 18 Mar 2008, 12:08

Aurora wrote:
Vortex wrote:
"Look mum, I managed to buy some crude oil this morning".

Oooh ta the plants are a bit rusty, could you just pour it in the can?