George Soros Spears the Myth of the "Free Market"

Discussion in 'Politics & Current Events' started by GringoTex, Jan 24, 2008.

  1. GringoTex

    GringoTex Member

    Aug 22, 2001
    1301 miles de Texas
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    The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.

    However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

    Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.

    continue...
     
  2. The Jitty Slitter

    The Jitty Slitter Moderator
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    Jul 23, 2004
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    But wait!

    Everyone knows that getting a mega mortgage is a great investment :rolleyes:
     
  3. Matt in the Hat

    Matt in the Hat Moderator
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    Sep 21, 2002
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    Typical Soros. All fear and no solutions. Let's be honest, the world has been in a super-bubble (whatever that made up term means) since the renaissance. Is a crash back to the dark ages on the horizon? :eek:
     
  4. The Jitty Slitter

    The Jitty Slitter Moderator
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    that was actually predicted as the consequence of the great war

    the shape of things to come
     
  5. Matt in the Hat

    Matt in the Hat Moderator
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    Sep 21, 2002
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    How did that turn out :D
     
  6. The Jitty Slitter

    The Jitty Slitter Moderator
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    They had to use the idea for Dr Who and the Daleks instead :D


    [​IMG]
     
  7. MattR

    MattR Member+

    Jun 14, 2003
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    I don't understand MiTH. In the past, we've agreed that this whole housing bubble/post-dot-bomb economy has been based on people borrowing money they had no business borrowing because there was no way in hell they were going to be able to pay it back. Now he mocks the bubble concept.

    Let's be honest, the middle class lifestyle in America has been supported for the last 10+ years by people borrowing money against the wealth "created" by increasing housing costs. Now it looks like Americans are done spending money; not because they are saving it, but because they can't borrow any more and they can't pay back what they've borrowed.

    Recently, whenever the Dow drops a few hundred points, the Fed cuts interest rates. Sometimes randomly as an emergency measure. The idea that making it easier to borrow money to fix the problem that people borrowed too much money is amusing.

    The economy is going to struggle the next few years. The issue is if the rest of the world can keep going without the American consumer.
     
  8. Matt in the Hat

    Matt in the Hat Moderator
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    I don't mock the bubble concept. I mock the superbubble concept.
     
  9. MattR

    MattR Member+

    Jun 14, 2003
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    What about the MEGAbubble?

    Seriously, though, I can see a drop in American consumer spending affecting, oh, off hand, agriculture in south america, industrial production in china and europe, textiles in southeast asia, VW in Mexico.

    Well, let's just say were rather connected.
     
  10. Matt in the Hat

    Matt in the Hat Moderator
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    I don't believe in it. It's sillier than the super bubble. Now the redonkulous bubble is something to fear.

    Never said we weren't.
     
  11. bigredfutbol

    bigredfutbol Moderator
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    Sep 5, 2000
    Woodbridge, VA
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    What about the uberbubble?
     
  12. Matt in the Hat

    Matt in the Hat Moderator
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    We do not speak of the uberbubble.
     
  13. BenReilly

    BenReilly New Member

    Apr 8, 2002
    The fundamental challenge is that we're not going to be able to continue consuming far more than we produce. We can debate semantics, but Soros is essentially correct about the "super-bubble" I'm afraid we are going to have to learn concepts like savings and investment as the world stops allowing us to live far beyond our means.
     
  14. Matt in the Hat

    Matt in the Hat Moderator
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    We don't even know what out means are yet.
     
  15. The Jitty Slitter

    The Jitty Slitter Moderator
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    We're living in a North Sea Bubble
    We're trying to spend our way out of trouble
    You keep buying these things
    but you don't need them
    But as long as you're comfortable
    it feels like freedom
    My American friends don't know what to do
    But they'll wait a long time for
    a Beverley Hills coup
    War! What is it good for
    It's good for business
     
  16. argentine soccer fan

    Staff Member

    Jan 18, 2001
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    Very interesting theory by Soros. The idea of a superbubble sounds cool.

    I'd hurt to burst his supperbubble, but unless this is just a summary of his conclusions, and he has his calculations listed elsewhere, it appears that he is making a lot of assumptions that he is not proving.

    But who cares? As far as speculations go, it is a plausible one, and he does reach the kind of conclusion that in this day and age just might win him a Nobel prize in Economics.
     
  17. The Jitty Slitter

    The Jitty Slitter Moderator
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    the thing that gets me right

    I had to get my business through the 911/telecoms bust in the UK in 2001

    AND i was around for the dotcom bust

    So far (touch wood) this is not a patch on that stuff.
     
  18. GiuseppeSignori

    Jun 4, 2007
    Chicago
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    nah, we're just waiting for the great leap forwards :D
     
  19. saosebastiao

    saosebastiao New Member

    May 22, 2005
    Nah...the economics prize isn't awarded by the same goons as the peace prize.
     
  20. The Jitty Slitter

    The Jitty Slitter Moderator
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    [youtube]-C17HGt4XEk[/youtube]
     
  21. GiuseppeSignori

    Jun 4, 2007
    Chicago
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    thanks for that. but what i'm really waiting for is Mr. Love & Justice (release date - 4/22 US, 3/3 UK)

    [​IMG]
     
  22. Rostam

    Rostam Member

    Dec 11, 2005
    I agree with the article even though it doesn't provide a "solution" but the source of the problem is pretty obvious, and very much in-line with what I have been saying for a while. And I still wonder where Milton is and how he is doing!
     
  23. DoctorD

    DoctorD Member+

    Sep 29, 2002
    MidAtlantic
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    Until China allows its currency to be freely traded, there is no free market, so it is hard to draw any conclusions.
     
  24. SgtSchultz

    SgtSchultz Member

    Jul 11, 2001
    Parts Unknown

    Why would anybody save. Look at the CD rates and then look at real inflation. You tell me if it makes any sense to save.

    I am disgusted with this so-called stimulus plan. It is about time people and corporations take their medicine. Henry Paulson, Bernanke, Bush, Cheney and the alleged Maestro(Alan Greenspan) should be taken out and given a major a** whopping. What makes this all worse is the Democrats have a chance to lead and they are dropping the ball.

    Dont you love how the banks dont want any regulations. They go to congress and tell them regulations are killing them. Yet, when the slightest bit of turbulence comes their way, they want a bailout. Dont tell me this plan is not a bailout for the banks, cause that is what it is.

    Give me $600.....whoppee. At the rate the dollar is falling, that $600 will be more like $400.

    Not to get political but the only candidate who has been honest about our plight has been Ron Paul. He is absolutely right about the Fed.

    Rant off....
     
  25. jammybastard

    jammybastard Member

    Oct 7, 2003
    Flyoverland
    Typical Matt. All rhetoric and no facts.
    :cool:
     

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