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Is the Free Market to blame for Booms and Busts?

post #1 of 13
Thread Starter 

In short, no.

 

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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post #2 of 13

Indeed, no. It's oil that plays the strongest role in booms and busts of the past 20 years. 

 

"Wall Street, sub-prime and regulatory failure are not the ultimate cause of the economic melt down. The root of this crisis is probably oil."

http://en.demagazine.eu/thinking/oil-caused-recession-not-wall-street

 

I have come to my conclusion about peak oil. Both causing financial, social and health problems.

 

The good news is that through 2015, 2018 even nothing major will happen. But by 2025, there will be no more question about where we are in relation to oil. I.E. screwed.

 

post #3 of 13

Actually it is the Fed that has played the biggest role in the books and busts.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #4 of 13
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post

Actually it is the Fed that has played the biggest role in the books and busts.

 

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tumblr_m67f8wBPht1qb97lf.jpg

 

tumblr_m67f7643711qb97lf.jpg

 

tumblr_m67f986n8h1qb97lf.jpg

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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post #5 of 13

There is no such thing as a "free market" The term is an oxymoron.... so in short, no. However, the presence of a central bank (as of 1913, the "Federal" Reserve), has been instrumental in such.

"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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post #6 of 13
Quote:
Originally Posted by sammi jo View Post

There is no such thing as a "free market" The term is an oxymoron.... so in short, no.

 

Wrong. If you mean to say that there is no true "pure" free market in any country, then I'd agree.

 

 

Quote:
Originally Posted by sammi jo View Post

However, the presence of a central bank (as of 1913, the "Federal" Reserve), has been instrumental in such.

 

Huh?

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #7 of 13
Thread Starter 

tumblr_m6a6dp1lhz1qbogplo1_500.jpg

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

Reply

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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post #8 of 13
Quote:
Originally Posted by jazzguru View Post

 

 

The government attempting to provide "something for nothing" in exchange for votes and power is the source of bubbles. As you well understand, true competition prevents bubbles by flattening costs and valuations.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #9 of 13

"boom and bust" is actually an artifact of information delay in a system with feedback.  In all sorts of natural processes, you can find oscillation when there's a path-differential.  "boom and bust" in economics is an example that (a) information isn't instantaneous (b) the market is operating.

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post #10 of 13
Quote:
Originally Posted by Splinemodel View Post

"boom and bust" is actually an artifact of information delay in a system with feedback.  In all sorts of natural processes, you can find oscillation when there's a path-differential.  "boom and bust" in economics is an example that (a) information isn't instantaneous (b) the market is operating.

 

That's certainly part of it. But this is exacerbated by the information misdirection and distortion that happens as result of price signal (a critical piece of information used in economic decision-making) distortion that happens as a result of monetary policy (manipulation of the supply of money and credit by The Fed or other similar entity.)

 

In other words, The Fed manipulates the money supply in a way that send false information signals that magnifies and makes (much) worse the information delay issue you have pointed out.

 

And it is much, much worse because their signals cause investments that are not quickly or easily transformed (into other resources and investments) or liquidated and so the recovery time creates additional delay (and economic discomfort.)


Edited by MJ1970 - 7/4/12 at 7:35am

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #11 of 13

MJ1970: I tend to agree with you.  There would probably be general benefit in resetting currency valuation to a commodity-backed index, just as it benefits an analog electronic system to have a stable ground.  But just as it is that lawyers write laws to benefit themselves, bankers make policies to benefit themselves, so it's a bit of a quagmire.

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post #12 of 13
Quote:
Originally Posted by Splinemodel View Post

MJ1970: I tend to agree with you.  There would probably be general benefit in resetting currency valuation to a commodity-backed index, just as it benefits an analog electronic system to have a stable ground.  But just as it is that lawyers write laws to benefit themselves, bankers make policies to benefit themselves, so it's a bit of a quagmire.

 

You're absolutely correct. I'm at a loss of how to get out of the cycle.

 

I believe there has to be an intellectual revolution in which a new respect for liberty and a greater skepticism of state control (along with its corporate partners and ruling elites) of things like the economy (among many other things) is more common. But I don't know how we get there. It would be nice to get their peacefully, gently and gracefully. But I fear we will get their violently, roughly and tumultuously.

 

A core problem is that you have a public that is largely ignorant of the deeper issues and lacking either the ability or inclination to apply reasoning to it and call the so-called "public servants" on the carpet for being partners in this activity. You have a public that is predominantly educated in government schools which have no real interest in teaching people to reason and use logic but rather regurgitate "facts" (often propaganda) and parrot back superficial and simplistic understandings of the world to satisfy teachers, school boards and so on. In fact, it's not an unreasonable statement to suggest that the population's inability or unwillingness to apply reasoning and logic to the world and circumstances in which they live greatly benefits those who seek to gain, hold and exercise power...particularly through the state.

 

My own pessimistic feeling is that it will all have to crash before it gets rebuilt. And maybe that's the way of humankind. We don't really look to change or re-do things unless what was there before comes crashing down. We don't really seriously examine anything until things get really bad. We don't really question things until what's been happening is plainly, obviously and clearly exposed as a failure and a fraud.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #13 of 13

The first step is to, somehow, axe the fed.  400 years ago, there was great concern over the separation of church and state.  Now, the more timely distinction is between bank and state.

 

Realistically, it is only going to be fixed by pushing for the development of energy technologies and deep-space exploration.  The ambitious, philosophical humans will leave Earth.  They MUST leave Earth.  Human history is really just a catalog of disgruntled nomads.

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