Is a depression just around the corner
- Thread starter Angelo
- Start date
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Dear Jen,
1. Hmm... "a Depression once every 75 years?" Say who?
2. What's the logic/rationale behind the 75 years cycle, if I may ask?
3. Was there another worldwide depression in 1855, in 1780, in 1705, 1630 etc? 75 years preceding before 1929?... I do not recall reading the history about these global recessions at all. Have you?
Cheers,
Kenneth KOH
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Dear Jen,
If you look at the roaring HK Hang Seng Index today, who knows this Index will soon dive down after the post-2008 Beijing Olympic Games, similar to what you are expecting now?
Cheers,
Kenneth KOH
Hi Jen,
We have been roaring - property prices and share prices have pretty much doubled in 6 years.
But from 1925 - 1929, stock prices quadrupled! The Dow Jones went from 100 to 400. The depression itself was caused mainly by the failure of the banks, who could not collect on the 100% margin loans they had made after prices fell 80%. The banking system pretty much ceased functioning by 1932. I don't think this would occur today. Tighter credit than in 1929 and a central bank willing to raise interest rates earlier (as they did in 2002/3 as prices became bubble-like) I think makes a depression unlikely these days. Recessions are much more likely in my opinion and perhaps follow a broad time cycle as you suggest.
- Dave99
This is a key point - one of the reasons the "Great Depression" was a depression was due to a combination of factors which caused a perfect storm.
To claim that depression happen like clockwork every x years is a gross simplication. Many things must go wrong:
1) World War 1 weaking economies (and dont try to compare Iraq to WW1)
2) Huge credit/debt spending without the sophisticated banking system we now have to prevent systemic risk
3) Terrible Federal Reserve actions by cutting money supply by 1/3 in the middle of a recession (rest assured, they have learnt that lesson)
etc etc..
Hi Folks
It's me again. I was interested in reading kenneths post earlier. There is a great little book called the great cycle by dick stoken. If you go to page 81 of this book it lists the times that major depressions hit, based on the predominant economies of the time. First France in the 1600's then great britan in the 1700-1900's and then the united states in the 1900's. The interesting thing about the dates indicated in this book is that they coincide very well with the dates Kenneth mentioned.
I can't explain why this 75 year cycle exists but apparently it does.
It's me again. I was interested in reading kenneths post earlier. There is a great little book called the great cycle by dick stoken. If you go to page 81 of this book it lists the times that major depressions hit, based on the predominant economies of the time. First France in the 1600's then great britan in the 1700-1900's and then the united states in the 1900's. The interesting thing about the dates indicated in this book is that they coincide very well with the dates Kenneth mentioned.
I can't explain why this 75 year cycle exists but apparently it does.
Angelo,
How do depressions in three separate countries BEFORE a global economy was in place (with speed of light communication) align to mean a depression in Australia in 15 years?
You can draw a line between any three points to identify a fourth - it doesn't mean that there is any particular relationship between those four points, other than your line.
Your bow continues to grow in length.....
Angelo, it's pretty clear at this point that you are simply looking for people to validate your views and that you are not interested in having a rational debate.
As such, unless you can demonstrate otherwise, I don't see much point in contributing to this thread further.
Cheers,
Aceyducey
How do depressions in three separate countries BEFORE a global economy was in place (with speed of light communication) align to mean a depression in Australia in 15 years?
You can draw a line between any three points to identify a fourth - it doesn't mean that there is any particular relationship between those four points, other than your line.
Your bow continues to grow in length.....
Angelo, it's pretty clear at this point that you are simply looking for people to validate your views and that you are not interested in having a rational debate.
As such, unless you can demonstrate otherwise, I don't see much point in contributing to this thread further.
Cheers,
Aceyducey
Hi Folks
It's me again. I was interested in reading kenneths post earlier. There is a great little book called the great cycle by dick stoken. If you go to page 81 of this book it lists the times that major depressions hit, based on the predominant economies of the time. First France in the 1600's then great britan in the 1700-1900's and then the united states in the 1900's. The interesting thing about the dates indicated in this book is that they coincide very well with the dates Kenneth mentioned.
I can't explain why this 75 year cycle exists but apparently it does.
So, Angelo, if you believe there's going to be a depression, what do you plan to do about it?
I guess that if we were heading into a time where property prices were to drop, my first thoughts would be to lower my debt to equity ratio. I would also want to ensure that my properties were more than adequately taking care of them selves. I would probably also be looking into investing in something like gold as usually in times of economic crisis gold usually will go up.
As for the earlier comment that someone made that I'm not interested in having a rational debate, they are absolutely correct. I'm not interested in having ANY debate, I am interested in hearing other peoples opinions and explanations about why they think what they think. I believe that we have to be careful about trying to be right all the time. Some time ago people were convinced that the world was flat. I have worked in the area of science long enough to know that Ideas that were once taken as fact are now considered as fiction.
Richard Bandler once said that there are a lot of people who consider them selves as being smart doing some very stupid things. I think he may be on to something. In a lot of cases it may be more beneficial to ask questions rather than make bold statements that may be disproved with time.
As for the earlier comment that someone made that I'm not interested in having a rational debate, they are absolutely correct. I'm not interested in having ANY debate, I am interested in hearing other peoples opinions and explanations about why they think what they think. I believe that we have to be careful about trying to be right all the time. Some time ago people were convinced that the world was flat. I have worked in the area of science long enough to know that Ideas that were once taken as fact are now considered as fiction.
Richard Bandler once said that there are a lot of people who consider them selves as being smart doing some very stupid things. I think he may be on to something. In a lot of cases it may be more beneficial to ask questions rather than make bold statements that may be disproved with time.
I have to say that of all the arguments and reasons that I have heard to support the "forthcoming recession" theory, the reasoning that human behaviour has essentially remained unchanged, well, for centuries is (imho) the most compelling.
But it still doesn't tell us when the shadow will arrive, or which shadow it will be, that causes the lemmings to jump off the cliff though.
M
But it still doesn't tell us when the shadow will arrive, or which shadow it will be, that causes the lemmings to jump off the cliff though.
M
BTW - I thought this information would be useful.
It helps communicate that some beliefs expressed fit into the fiction category....
http://www.smh.com.au/news/national/baby-boomers-face-a-super-shock/2006/10/23/1161455665709.html
One might say that babyboomers live high, but have clay feet.
I don't see the sharemarket behaving as you suggest Angelo.
My view in brief (as Angelo requests): there will be economic good times and economic bad times in the future, just as there were in the past. These will occur at regional, national, international and global levels. Sometimes affecting entire economies, sometimes only affecting some sectors. They will occur due to factors beyond my control or ability to predict.
There will also be political shifts - countries will completely vanish or change their form of government. Over the last 30 years more than half the nations of the world have changed their political systems at least once, appeared or disappeared.
Our knowledge will continue to accumulate, doubling every few years and driving innovation that sees us reshaping our society, culture and humanity to manage and survive this rate of change.
Major disasters will occur every year - shaping how we view the world, our own nation and our neighbours.
There will be wars.
Millions will die.
Millions will be born.
Species will become extinct. Some humans will grieve and try harder to preserve what remains. Others will remain fixed in their own ego-centric human world.
At every point there will be opportunities - many will not be visible six-months ahead, let alone twenty years.
Some investors will take them and prosper.
I focus on keeping my feet on the ground and my eyes on the horizon and terrain just ahead.
Others will be looking higher than the horizon and miss the diamonds at their feet.
I look for what is coming that I can see and take appropriate precautions for the unseen hazards. But I avoid speculating about the unknowable threats and opportunities as they, like ghost stories, diminish in perspective in the clear light of day.
I'm in property - because people need places to live.
I'm in energy - because this is the fuel of our global society.
I'm in education - because this is a requirement for any wishing to survive and thrive in our society.
I'm in products for the elderly - because they are a growing influence on our politics and markets.
I'm in selected stocks - because each provides a valuable product or service that society needs - in good and bad times.
I'm in funding investments - selectively supporting concepts and businesses that meet my criteria by providing services and products that society needs.
The economy is a factor, but not a driver, in my investments.
Cheers,
Aceyducey
It helps communicate that some beliefs expressed fit into the fiction category....
http://www.smh.com.au/news/national/baby-boomers-face-a-super-shock/2006/10/23/1161455665709.html
One might say that babyboomers live high, but have clay feet.
I don't see the sharemarket behaving as you suggest Angelo.
My view in brief (as Angelo requests): there will be economic good times and economic bad times in the future, just as there were in the past. These will occur at regional, national, international and global levels. Sometimes affecting entire economies, sometimes only affecting some sectors. They will occur due to factors beyond my control or ability to predict.
There will also be political shifts - countries will completely vanish or change their form of government. Over the last 30 years more than half the nations of the world have changed their political systems at least once, appeared or disappeared.
Our knowledge will continue to accumulate, doubling every few years and driving innovation that sees us reshaping our society, culture and humanity to manage and survive this rate of change.
Major disasters will occur every year - shaping how we view the world, our own nation and our neighbours.
There will be wars.
Millions will die.
Millions will be born.
Species will become extinct. Some humans will grieve and try harder to preserve what remains. Others will remain fixed in their own ego-centric human world.
At every point there will be opportunities - many will not be visible six-months ahead, let alone twenty years.
Some investors will take them and prosper.
I focus on keeping my feet on the ground and my eyes on the horizon and terrain just ahead.
Others will be looking higher than the horizon and miss the diamonds at their feet.
I look for what is coming that I can see and take appropriate precautions for the unseen hazards. But I avoid speculating about the unknowable threats and opportunities as they, like ghost stories, diminish in perspective in the clear light of day.
I'm in property - because people need places to live.
I'm in energy - because this is the fuel of our global society.
I'm in education - because this is a requirement for any wishing to survive and thrive in our society.
I'm in products for the elderly - because they are a growing influence on our politics and markets.
I'm in selected stocks - because each provides a valuable product or service that society needs - in good and bad times.
I'm in funding investments - selectively supporting concepts and businesses that meet my criteria by providing services and products that society needs.
The economy is a factor, but not a driver, in my investments.
Cheers,
Aceyducey
We have had this discussion many times before.
Try here.
http://www.somersoft.com/forums/showthread.php?t=25955
http://www.somersoft.com/forums/showthread.php?t=27099
If you would like we could put together statistically supported arguements with sound? economic logic supporting that a depression will occur tomorrow!
We could also do the exact opposite.
Economics is more art than science.
It is the only area where the expert can definitively give you a prediction of what is going to happen tomorrow supported by theory, data, models, etc then, when the prediction fails to occur give you a perfectly legitmate response, supported by theory, data, models, etc of why what they predicted to happen yesterday did not happen today.
For all of you quoting statistics, I suggest reading works by economist Steven Levitt. It might put your data in perspective. Its not about what the data says, it is about asking the right question of the data.
Try here.
http://www.somersoft.com/forums/showthread.php?t=25955
http://www.somersoft.com/forums/showthread.php?t=27099
If you would like we could put together statistically supported arguements with sound? economic logic supporting that a depression will occur tomorrow!
We could also do the exact opposite.
Economics is more art than science.
It is the only area where the expert can definitively give you a prediction of what is going to happen tomorrow supported by theory, data, models, etc then, when the prediction fails to occur give you a perfectly legitmate response, supported by theory, data, models, etc of why what they predicted to happen yesterday did not happen today.
For all of you quoting statistics, I suggest reading works by economist Steven Levitt. It might put your data in perspective. Its not about what the data says, it is about asking the right question of the data.
I'm half way thru reading Steven Levitt's "Freakonomics"...what an eye opener...and so well presented. Tis an amazing book and easy to read.
Gee...
WA's going well, Brisbane's getting a lot of interest, last i heard Victoria was in front of Brisbane on the property clock, sydney isn't gonna go down any farther, the world economy is said to be stabilising and global outlooks are good, and everyone's talking about depressions.
While i'm the first to say "history has a lot to teach us".... well.... i'm an optimist DAMN IT!
but i have to admit.... if a flamin imbecile like George Bush can become leader of the "free" world (what a joke) then anything could happen.
WA's going well, Brisbane's getting a lot of interest, last i heard Victoria was in front of Brisbane on the property clock, sydney isn't gonna go down any farther, the world economy is said to be stabilising and global outlooks are good, and everyone's talking about depressions.
While i'm the first to say "history has a lot to teach us".... well.... i'm an optimist DAMN IT!
but i have to admit.... if a flamin imbecile like George Bush can become leader of the "free" world (what a joke) then anything could happen.
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