I have been recently thinking about the economic crisis and couldn't help but notice that this isn't the first time that at least the western world has been in this situation. Does anyone else think that this is the consequential result of how finance is managed, meaning that (collectively) invest in the banks etc and get paid interest, have pension funds which invest and earn interest, buy houses that rise in value (in most cases) and have an economy that relies on growth to meet the needs of both goverment and the people. it seems to me that we will always find ourselves in these sort of crisis from time to time because we are trying to maximise the growth of our money and looking for the next sure bet, in the past that has been investing in developing countries, investing in people the sub prime market and the next bomb shell could be if something goes wrong in either/or china and russia. what do you think?
As much as Gordon Brown tried to persuade everyone for a decade that the era of 'boom and bust' was over, it will never be over as long as we live in a capitalist society. Over the long term, economies generally grow, and most developed economies have a long-term average growth rate that will have held for the past 50 years or so. Some economists think there is a cycle that works on 4-5 years between peaks troughs, others reckon it's closer to 20-25 years and some think it's more like 50 years. No economist thinks that you can have capitalism without these cycles in growth - whether it be war, natural disasters or man-made financial errors, there will always be something to stop and reverse economic growth every so often.
I seem to remember a crisis about third world debt and wasn't there a big run on the stock markets in the 1930's after the roaring 20's, in this country i remeber a crisis reagrding the european currency regulatory device and we kept putting up interest rate to try and stabilise the pound only to find that speculators had such a big influence that it was no good however much interventio was done by goverment
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