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Time to raise interest rates, time to stop false BRICK economy

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Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SuperV wrote: »
    If the wheel stops, it will be very hard to make it move again. If the wheel stops, all bubble wealth will be worth... 0.

    Hard to see the wheel stopping. The adjustment may be painfull but may well be spread over a decade or so.
  • SuperV
    SuperV Posts: 204 Forumite
    Thrugelmir wrote: »
    Hard to see the wheel stopping. The adjustment may be painfull but may well be spread over a decade or so.

    If we think of a wealth creation as of a centre of a wheel and consumption as of a rim, then it is easy to imagine that a healthy balance is needed.

    But, if the rim becomes to heavy for the centre to sustain, then the rim will lose its shape and the wheel will start slowing down in a cycle of booms and busts.

    The choice is stark - fix it or lose it. When the wheel loses its shape it may be easier to make a new wheel.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SuperV wrote: »
    If we think of a wealth creation as of a centre of a wheel and consumption as of a rim, then it is easy to imagine that a healthy balance is needed.

    Wealth doesn't equate to happiness.
  • SuperV
    SuperV Posts: 204 Forumite
    Thrugelmir wrote: »
    Wealth doesn't equate to happiness.

    Tell that to Sudanese... there is a minimum that everyone should have.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SuperV wrote: »
    Tell that to Sudanese... there is a minimum that everyone should have.

    That's different to accumulating wealth.
  • SuperV
    SuperV Posts: 204 Forumite
    Thrugelmir wrote: »
    That's different to accumulating wealth.

    Current wealth destruction affects everyone. Banking affects almost only poor as redistribution favours rich.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SuperV wrote: »
    Banking affects almost only poor as redistribution favours rich.

    Why pick on banking?

    Banker bashing has become monatoneous. As if everybody else in business is an angel and is operating a charitable organisation.
  • SuperV
    SuperV Posts: 204 Forumite
    Thrugelmir wrote: »
    Why pick on banking?

    Banker bashing has become monatoneous. As if everybody else in business is an angel and is operating a charitable organisation.

    You are right, there are many others as well. The banking is just the most obvious way how no wealth creation with a haircut consumption was made. And taking the biggest haircut...

    No wealth creation while there are more men means only one thing. Those thinking of some other solutions should remember that probably 90% of banking relies on increasing number of consumers ready to get into housing, shares, etc...

    It was simple to prepack bricks and that was exactly what the most of banks did - packaging bricks into nice wrappers charging excessive amounts for the wrappers. That is not a wealth creation support. But it was simple for banks and people employed in banks.

    Banks role is to help utilise wealth creation by using the existing wealth. It is not in bubble creation just because it is simple as the complete procedure was in place.

    Banks have to reform - to provide support for real wealth creation, not bubbles. It will be harder for them and for their employees I agree. But the alternative is that the wheel will eventually stop.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SuperV wrote: »
    It was simple to prepack bricks and that was exactly what the most of banks did - packaging bricks into nice wrappers charging excessive amounts for the wrappers.

    Seems as it wasn't bricks just in the USA but cornfields and non-existant properties.
  • SuperV
    SuperV Posts: 204 Forumite
    Thrugelmir wrote: »
    Seems as it wasn't bricks just in the USA but cornfields and non-existant properties.

    Accepted and repacked by bankers? Due diligence... was forgotten.
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