The Housing boom was the main catalyst for economic growth for several years...
Submitted by Jim Brown on Thu, 09/25/2008 - 18:30
The Housing boom was the main catalyst for economic growth for several years...and now it's over. What will be the next catalyst, if any?
There's Only One "Next Big Thing" That Can Work
There's Only One "Next Big Thing" That Can Work to save the living standards of the American (USA) people: FREEDOM!!
It might look like this:
Create a free banking system that would be the envy of the world, featuring:
anonymus owner accounts
privately insured deposits
competing curriencies
privately owned and managed currencies
gold (or other commodity) backed currency
silver & gold coinage
Eliminate the income tax on wages, salaries and profits for ordinary individuals and firms (non-corporate)
Strengthen the regime of property rights against political interference.
Create a worldwide regime of universal unalienable rights, which would necessarily entail open borders, the ability to hold clear title to property at any point on the globe and the concomitant right to engage in any peaceful trade and enjoy the fruits thereof unhindered.
It ain't easy being green..but anything that fits into the
"green economy" bubble we are about to begin blowing
They are still searching
"Reality is the leading cause of stress amongst those in touch with it."
--Jane Wagner
A Republic, If You Can Keep It
Peter Schiff explains that most of the US/EU "growth"...
...is just debt based spending.
If the US and EU want future economic growth, they will have to sell goods & services to the world instead of just importing them.
At one time, Britain was the "workshop of the world". Then the USA became the manufacturing powerhouse. Now its China.
The link between industry and prosperity is obvious.
"As for me and my home. We will read Peter Schiff."
"Armed robber him need gun. Authority man him need pen.
Authority man in charge of money. Him no need gun, him need pen. Pen got power gun no get. If gun steal eighty thousand naira. Pen go steal two billion naira." - Fela Kuti
Yes,
we need to move away from the "bubble economy" idea, and get back to real economic growth that is based on real wealth and production.
The "bubble economy" is the "boom/bust cycle" that Hayek warned about.
Huh?
What do you mean?
Real, sustainable economic growth comes from earning, saving, and investing, NOT borrowing and spending. The housing boom was a symptom of inflation driven by the Fed. It did not "catalyze" growth. It catalyzed a disease that is now about to kill us.
"Metastasized" would be more
"Metastasized" would be more appropriate than "catalyzed".
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"The main thing that I learned about conspiracy theory is that conspiracy theorists actually believe in a conspiracy because that is more comforting. The truth of the world is that it is chaotic..." —Alan Moore
Slow and Steady
Get's the job done.
_______________________________________________________
"Let the good heart speak words of true peace, not inciting others to further war." -- B.I.S.
Yes, it was artificial. So what's the next artificial catalyst?
"Lead, follow, or get out of the way."
-- Thomas Paine
A Republic, If You Can Keep It
this may the greatest ever
hall of fame quality, Ruthian bubble...interesting question, I think the lack of response so far indicates an ominous sense of the trouble we are in. While we were deluding ourselves thinking our houses were gonna make us effortlessly rich, the manufacturing base went bye bye.
Think about it, we thought we were richer when we borrowed money for a home. And they let us borrow even more on HELOCs to give us a more tangible sense of "debt wealth". Our ability to borrow became a measure of our wealth. They made more money, we owed more money yet felt wealthier. And now they want to be paid, by us, for the bad loans and borrowing they did. You can't make this stuff up. God help us.
With the incredible development of economic competition around the world over the past 10 years, I don't think its pessimistic to predict some real lean years. But maybe Im just not entrepeunerial. Perhaps we can use the CIA to go around fomenting wars around the world and we can sell more arms, etc. We are good at that.
Our ability to borrow became a measure of our wealth.
Absolutely
"Lead, follow, or get out of the way."
-- Thomas Paine
A Republic, If You Can Keep It
You don't understand
What was "catalyzed" was not growth as your post claims. It was consumption made to look like wealth. And now the wealth is gone.
The next round of inflation will drive up ALL prices and make us all poorer because there is no more wealth to consume.
I didn't say "What was "catalyzed" was not growth" as you say
I said the housing boom was the catalyst.
"Lead, follow, or get out of the way."
-- Thomas Paine
A Republic, If You Can Keep It
You said
You said growth was catalyzed by the housing boom. I am saying that it was not growth. It was the illusion of growth created by consumption of wealth driven by inflation. We ate all the corn, then we ate the seed corn, then we borrowed corn from the neighbors. Now the field is fallow, the cupboard is empty, and the neighbors are knocking on the door.
There is no more wealth to consume in a bubble. This was Von Mises' "crackup boom". We can either collapse in a drastic deflation like the Great Depression or perish in the fires of Weimar-style hyper-inflation. Take your pick.
What will be next boom to grow the economy?
"Lead, follow, or get out of the way."
-- Thomas Paine
A Republic, If You Can Keep It
I hear the crickets....
we know what went wrong maybe, but we dont know what the future holds. Not being critical (I have no clue), buts its a little scary.