Surviving the second Great Depression - Bob Beckman

ianmr65

“In no circumstances enter the derivatives trading market without first agreeing it in writing with me ... at some time in the future it could bring the world’s financial system to its knees" - Julian Hodge - Private Banker and Philanthropist in memo dated November 1990 to senior officers of his bank.

The Downwave - Surviving the second Great Depression by Robert Beckman. Available for a mere £2.76 from amazon

Bob Beckman wrote it in 1982. Was wildly derided, at the time, and missed his predictions by about 25 years. But as the book speaks about 70-90 year cycles and bubbles this is not that surprising.
His chickens are finally coming home to roost. The book is spookly precient about what's happing in the capital, property and derivatives markets today.

Bob Beckman and Jullian Hodge were multi millionaires and are both dead. So worth listening to, and they can't possible have any axes to grind.

If they were around now, they would be giving a huge "I TOLD YOU SO", to the world.

John_Pierpoint

Bob Beckman lived in a rented flat in the Barbican (Re-built bombed northern part of the City of London).
He used to do a daily 5 minute slot on the then fairly new London Broadcasting Company (LBC).
The situation then was buoyed up by plentiful safe oil at falling prices $xx.xx per barrel. I remember Bob Beckman saying the economy has already received a huge boost from falling oil prices - and that was in the days of UK Plc having a big surplus. The tax on this enabled Margaret Thatcher to appear to have a Midas touch.
In 1987 it looked like his predictions might be coming true, but in reality most of the problem was caused by simplistic computerised trading systems all going sell sell sell at the same time. The central bankers got together, as now, and pumped money into the global system and it wobbled back onto its feet.
Our chancellor Lawson, who up to then had been one of our best, was forced to clamp down on the resulting inflation, causing a recession. Japan fudged the situation and its economy went sideways. Lawson clamped down on mortgage interest relief and double relief for unmarried persons, when the property market was already looking "toppy". We had 5 to 10 years of house prices falling, and lots of repossessions.

The other factor that boosted production and killed inflation was globalisation, following the collapse of communism; it gave us cheap educated workers. China & India are now major global players but their prices are going up as our currency falls. Their demand is putting commodity prices through the roof and oil is now $yyy.yy per barrel and we have used up most of our secure supply. Meanwhile the world's population is going up by zzz,zzz poorly educated mouths per day. Lots more little recruits for those with very strange "absolute" agendas.

Ask yourself, do you know the values of x, y & z, if you don't, can I suggest you find out. Then ask our political masters just what sort of rabbit they propose to pull out of the hat, this time round.

My personal fear is that the West is in denial and trying to inflate its way out of the problem in the short term, which could put the economy back to the 1970's.

wombat42_2

Yes I remember hearing Bob Beckman on LBC, particularly at the time the Japanese stock market tanked. he said it was sure bet their stock market would fall from 39,000 to 10,000 and he was right about that.Do we know anything about his demise ?

earlgrey_3

ianmr65 wrote: »

Bob Beckman wrote it in 1982. Was wildly derided, at the time, and missed his predictions by about 25 years.

Yep, and wasn't the only one rubbing his hands at the thought of the end of the world as we know it. It didn't happen then so doesn't that tell you something? Such that all the pessimists could just possibly be wrong yet again?

OK, so the end of the world is nigh, but I tend to wonder if the current pessimists will be most unhappy if what they predict does happen or if it doesn't.

Yes things are a bit rocky and we all grasped that months ago so wouldn't it be more useful move on now and consider the solutions?

ianmr65

wombat42 wrote: »

Yes I remember hearing Bob Beckman on LBC, particularly at the time the Japanese stock market tanked. he said it was sure bet their stock market would fall from 39,000 to 10,000 and he was right about that.Do we know anything about his demise ?

Survived by his wife in Monaco, so he must have been doing ok for himself at the end.

Obit here:

www.timesonline.co.uk/tol/comment/obituaries/article3104632.ece

ianmr65

earlgrey wrote: »

Yep, and wasn't the only one rubbing his hands at the thought of the end of the world as we know it. It didn't happen then so doesn't that tell you something? Such that all the pessimists could just possibly be wrong yet again?

OK, so the end of the world is nigh, but I tend to wonder if the current pessimists will be most unhappy if what they predict does happen or if it doesn't.

Yes things are a bit rocky and we all grasped that months ago so wouldn't it be more useful move on now and consider the solutions?

I take your point, and i'm sure Bob was as pleased as anyone that his direst predictions didn't come to pass in his lifetime, despite what it meant for his reputation. reasons why are extremely eloquantly outlines in John Poierpoints post.

The fact is that Beckmans predictions were all about cycles and bubbles:
Beckman predicted an imminent 50- to 60-year overall slowdown in the world economy, with periodic upturns, and bubbles. His analysis was essentially correct but his timing was out, and has been borne out, subseqantly.

Since the early 1990's markets have been talked up and talked up by Optimists. Principally property, stock and shares, and latterly credit, and securities.
Have a look at the Property threads on this MSE boards They've had to ban new 'house price crash' threads, and consolidated them all into one. That thread runs to 100 pages, with 100,000 views. The property market has been talked up the most.
House !!!!!! on TV, disingenous house price reporting from the all vested intrests. There are al lot of seriously worried people out there.

Beckman's book outlined causes, effects and what you should do to protect yourself, when the 'big one' hit. Well i think the big one is now.
His advice today would be I think : : sell unit trusts, shares, property bond, hedge fund holdings, and property. Rent, or find a house that you want to live in for the long term. Get rid of as much debt as you can. And put your money into gilts, gold and commodities, or on deposit, with the safest bank you can find.

ianmr65

John_Pierpoint wrote: »

My personal fear is that the West is in denial and trying to inflate its way out of the problem in the short term, which could put the economy back to the 1970's.

Yes i totally agree, but Bob's view, was that there would come a point, in a sufficiently large downturn, where helicopter dropping money to stimulate the economy would fail to work, and a period of deflation, and slump would follow. This is I fear what we are looking at,

The problem is that I don't think that the we have any choice: Not inflating, failing to support the banks, not cutting ntrest rates, now will lead to mass unemployment, homlessness, possibly riots and a great deal of misery, in the west.

These effects will come along as soon as the inflationary measures fail to work. But at least people will have had a chance to adjust. Think of it as a soft landing into the second great depression.

There is a solution open, one that had previously had a massive stimulating effect on the global economy, and meant that people were more than happy to suffer privations for the greater good. A world war.

earlgrey_3

In 1996 he also forcast a 20 year decline in house-prices. Just ater the price falls of the late 80s it sounded plausible enough but it didn't happen, quite the reverse, and 12 years on house prices are massively above those levels.

He found the most profitable use of his time was selling books and giving advice on the radio rather than investing. Again, what does that tell you? Perhaps that 'those who can do, those who can't... '

His real talent was realising that there will always be a market and plentiful buyers for tales of gloom and he was able to make a good living from it.

Have you heard, about dear Blanche?
Got run down by an avalanche....
It's great,
So grand,
It's wonderland...

Have you heard? It's in the stars
Next July we collide with Mars
Well, did you ever?
What a swell party, a swell party
A swelligant, elegant party this is!

purch

In 1996 he also forcast a 20 year decline in house-prices

...He was also forecasting the same in the mid 80's too.

If he'd bought his flat in the Barbican in 1985 instead of renting it, he could have made his 'estate' a fortune.

chesky369

His stance on property was almost religious - he would never have bought and always advised against doing so. However, in taking that point of view he ignored the fact that most people view their property as a home, rather than a house. It's true also that if you're rich you can afford to rent, it's those who have less in life that want the security of their own property.

John_Pierpoint

Ask yourself, do you know the values of x, y & z, if you don't, can I suggest you find out. Then ask our political masters just what sort of rabbit they propose to pull out of the hat, this time round.

I think the difference between x & y (oil price) is about a tenfold increase.
The rate of population increase is 200,000.

ianmr65 wrote: »

There is a solution open, one that had previously had a massive stimulating effect on the global economy, and meant that people were more than happy to suffer privations for the greater good. A world war.

Step one build a wall round the EU and fortify the beaches.
Step two decide who to pick on - we could have a go at the owners of the oil BUT burning the stuff contributes to global warming, might be better to bomb any city of more than 1,000,000 inhabitants. That would get the oil price down to $10 again.
It looks like there are still enough warheads lying about for a double application in case of survivors.
http://en.wikipedia.org/wiki/List_of_states_with_nuclear_weapons#Estimated_worldwide_nuclear_stockpiles

Ah not sure this will work too well, those of us left might find ourselves unemployed and "On the Beach".

Not likely to be many spare seats on the escape rocket to the moon. Good view of the dark side of the earth though. With the right sort of telescope, perhaps it would glow for 100,000 years.

Oh dear, I must cheer myself up and get back in touch with reality - now where have I put my copy of "HULLO" magazine?

John.

PS that is 200,000 PER DAY