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Financial crisis ! whats your opinion and why :)

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    Unfortunately if you understand anything about the global capitalist system, and the finance sector in particular, you'll know that whether lessons have been learnt or not, the whole thing is ****ed
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    (Original post by Classical Liberal)
    Well done on straw-manning the argument.

    Anyway, if we take your line of logic seriously all children should be taken away from their parents and put under the care of benevolent government, just in case the child's parents would do a bad job.




    Why do I get paid more than the NMW? If we take your logic seriously, that unless there is government interference wages will fall, how come everybody around me gets paid more than the NMW?

    It is because wages are a price. And prices are subject the competitive forces. And as long as there is competition amongst employers for labour, then labour will be protected from exploitation. It is not government that should or does protect the worker. It is that market and the ability to work elsewhere that protects the worker.

    "In competition, individual ambition serves the common good" - Adam Smith
    OH DEAR GOD HAVE YOU EVER LEFT THE UK.

    Go to Bangladesh, China and other developing countries and see how the market there provides for the people :rolleyes: .
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    (Original post by Classical Liberal)
    Anyway, if we take your line of logic seriously all children should be taken away from their parents and put under the care of benevolent government, just in case the child's parents would do a bad job.
    *sigh* from one extremity to another....
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    (Original post by py0alb)
    Let me get this straight. You are advocating that 10 year loans should have a higher interest rate than 1 month loans, and you think this would stabilise the economy.
    Yes - it would improve the economy. It is called the yield curve. It is the natural effect of peoples time preference. Money in the future is always worth less than the same money in the now. And the same money further in the future is always worth less than the same money earlier.

    Have you ever noticed how 10 year gilts have higher rates of interest than 1 year gilts?

    http://www.bbc.co.uk/news/business/m...lt/default.stm

    (But no, people don't want to tie their money up in things like long term bonds - so much for your theory)
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    (Original post by Genius7)
    OH DEAR GOD HAVE YOU EVER LEFT THE UK.

    Go to Bangladesh, China and other developing countries and see how the market there provides for the people :rolleyes: .
    Those nations are evidence for my position. We have been a capitalist nation for a very long time. And are very wealthy because of it. As compared to nations who have been capitalist for less time - such as China, India etc.

    China is only starting to catch up as it has started to liberalise its economy to significant extent. Not that I am saying China is a perfect market economy.
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    (Original post by Classical Liberal)
    Yes - it would improve the economy. It is called the yield curve. It is the natural effect of peoples time preference. Money in the future is always worth less than the same money in the now. And the same money further in the future is always worth less than the same money earlier.

    Have you ever noticed how 10 year gilts have higher rates of interest than 1 year gilts?

    http://www.bbc.co.uk/news/business/m...lt/default.stm

    (But no, people don't want to tie their money up in things like long term bonds - so much for your theory)
    I have not read the full details of this but I I think this is one thing that I do agree with somewhat.

    Making banks go back more to focusing on actually reallocating capital from savers to lenders in a more effective manner I shall read up on reserve banking thank you for the interesting article to read.
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    (Original post by Classical Liberal)
    Those nations are evidence for my position. We have been a capitalist nation for a very long time. And are very wealthy because of it. As compared to nations who have been capitalist for less time - such as China, India etc.

    China is only starting to catch up as it has started to liberalise its economy to significant extent. Not that I am saying China is a perfect market economy.
    WHAT??? you did not actually reply to my points and China has grown so effectively because of its manipulation of cheap labour and to its focus on STATE RUN capitalism not free market capitalism.

    Many of the biggest institutions in China are partly state run enterprises so although they have less regulations they are forced by the government to do as it wishes.

    Also China doesn't actually care about the lowest socio economic groups they just see them as cheap labour and almost disposable.
    If that what you are advocating then good luck bro :rolleyes:

    Also you clearly have no basis in economic reality CHINA IS RICHER THAN THE UK LOL.

    They are far less liberalised than us yet far richer in terms of GDP you really do need to get out of the UK mate.
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    (Original post by py0alb)
    lol, as if there is any demand for that. People just wouldn't put their money in the bank
    There are plenty of people who put their money into accounts where the interest rate is fixed for 1-5 years and withdrawing your money from the account prior to its maturity results in a significant financial penalty. These accounts are all over the place, of course there is demand!
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    (Original post by Genius7)
    WHAT??? you did not actually reply to my points and China has grown so effectively because of its manipulation of cheap labour currency and to its focus on STATE RUN capitalism not free market capitalism.
    Fixed.

    Many of the biggest institutions in China are partly state run enterprises so although they have less regulations they are forced by the government to do as it wishes.
    The biggest enterprises are always state run. The very nature of the state being a huge monolithic orgnasiation. For example the Chinese army being a massive organisation, the largest in the world.

    Also China doesn't actually care about the lowest socio economic groups they just see them as cheap labour and almost disposable.
    If that what you are advocating then good luck bro :rolleyes:
    I did not know 'China' had opinions, since when did a piece of land have opinions?

    Also you clearly have no basis in economic reality CHINA IS RICHER THAN THE UK LOL.
    You idiot. GDP per capita.
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    (Original post by Tateco)
    There are plenty of people who put their money into accounts where the interest rate is fixed for 1-5 years and withdrawing your money from the account prior to its maturity results in a significant financial penalty. These accounts are all over the place, of course there is demand!
    Such an idiot.

    What do you think would happen to the liquidity equilibrium curve if you abolished instant access accounts?
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    (Original post by Classical Liberal)
    Yes - it would improve the economy. It is called the yield curve. It is the natural effect of peoples time preference. Money in the future is always worth less than the same money in the now. And the same money further in the future is always worth less than the same money earlier.

    Have you ever noticed how 10 year gilts have higher rates of interest than 1 year gilts?

    http://www.bbc.co.uk/news/business/m...lt/default.stm

    (But no, people don't want to tie their money up in things like long term bonds - so much for your theory)
    :facepalm2:

    good lord you get stupider with each post. I thought your proposal was meant to stabilise things and encourage long term investment, not exacerbate severe boom and bust cycles.
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    (Original post by py0alb)
    Such an idiot.

    What do you think would happen to the liquidity equilibrium curve if you abolished instant access accounts?
    I was simply pointing out that you said there was no demand for fixed term accounts. I don't believe instant access accounts should be rid of entirely but moving away from the extreme levels fractional reserve is currently at will surely provide more stability.
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    (Original post by Classical Liberal)
    Fixed.



    The biggest enterprises are always state run. The very nature of the state being a huge monolithic orgnasiation. For example the Chinese army being a massive organisation, the largest in the world.



    I did not know 'China' had opinions, since when did a piece of land have opinions?



    You idiot. GDP per capita.
    Umm do you actually understand the origin of regulation because what you said is in effect contradictory. Regulation in the labour industry actually stopped it from collapsing!!!!

    Without the regulation the labour market would have eventually collapsed due to the destruction of the future productive potential of children so yes the labour market cannot run without regulation. So your point that a system that needs regulation is a bad system is moot.

    Also another market example is intellectual property without regulation that system could not exist. Are you also saying that it is a bad system and shouldn't exist. Regulation underpins capitalism without it capitalism would spiral out of control and simply not be able to exist.


    Firstly you didn't answer my point about the fact that systems that need regulation are not inherently bad systems.

    Secondly if you are talking about GDP per capita then Luxembourg is the richest state in the world but fat lot of good that does them on the international stage.

    You post about a piece of land having opinions is so retarded its unbelievable. We all know what I am referencing however because you can't answer my critiques you have to hide behind weak sarcasm.
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    (Original post by py0alb)
    :facepalm2:

    good lord you get stupider with each post. I thought your proposal was meant to stabilise things and encourage long term investment, not exacerbate severe boom and bust cycles.
    Not sure if serious?

    If you get more interest if you save for a longer period of time, then you have more of an incentive to save for long term investment.
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    There's isn't a crisis for me, or anyone I know. Lots of mates driving, buying cars, going on holidays. I'm getting a pay rise, + paying for my flight training... I'm living good and so are most people I know...

    Un-employed people are too picky and don't work hard-enough, simple as.
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    (Original post by Tateco)
    I was simply pointing out that you said there was no demand for fixed term accounts. I don't believe instant access accounts should be rid of entirely but moving away from the extreme levels fractional reserve is currently at will surely provide more stability.
    Should have instant access accounts for sure. The actual central bank money just needs to actually be there.
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    (Original post by Classical Liberal)
    Not sure if serious?

    If you get more interest if you save for a longer period of time, then you have more of an incentive to save for long term investment.
    Riiiight... and using the same logic, what is the incentive for firms when considering how to invest in their businesses? Long-term or short-term?

    I think you might be getting confused between investments and savings. They're not the same thing.
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    (Original post by Genius7)
    Umm do you actually understand the origin of regulation because what you said is in effect contradictory. Regulation in the labour industry actually stopped it from collapsing!!!!


    Yes. It is usually two fold. On the one side there a do gooders who pass laws that are well intended to protect people. On the other side there are special interest groups who know they will benefit from certain laws and use the do gooders as front me.

    The perfect example being NMW. It is promoted by do gooder Fabians in the vain hope that it will raise wages for poor people. And it is backed the the monopolistic trade unions trying to protect themselves for competition.

    Regulation is always an unholy alliance of do gooders on the one hand and special interest groups on the other.
    Without the regulation the labour market would have eventually collapsed due to the destruction of the future productive potential of children so yes the labour market cannot run without regulation. So your point that a system that needs regulation is a bad system is moot.
    I have never heard that claim before. Even Marx thought people would earn subsistence wages for godsake.

    Also another market example is intellectual property without regulation that system could not exist. Are you also saying that it is a bad system and shouldn't exist. Regulation underpins capitalism without it capitalism would spiral out of control and simply not be able to exist.
    The law underpins capitalism. Not arbitrary regulation.

    "Without the law there can be no freedom" - Greek Proverb

    Firstly you didn't answer my point about the fact that systems that need regulation are not inherently bad systems.
    What was the point?

    Secondly if you are talking about GDP per capita then Luxembourg is the richest state in the world but fat lot of good that does them on the international stage.
    Who cares about the world stage. They are well fed. Probably have nice cars. And can spend more of their lives chilling with mates or going on holiday.

    You post about a piece of land having opinions is so retarded its unbelievable. We all know what I am referencing however because you can't answer my critiques you have to hide behind weak sarcasm.
    Who is this 'China' who does not care about the workers?
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    (Original post by Tateco)
    I was simply pointing out that you said there was no demand for fixed term accounts. I don't believe instant access accounts should be rid of entirely but moving away from the extreme levels fractional reserve is currently at will surely provide more stability.
    More stability than what? Than our already extremely stable system? No bank runs for over 100 years until sloppy legislation allowed moral hazard to interfere with the workings at Northern Rock.

    There is no demand for a banking system that doesn't offer instant access accounts. The money supply would reduce to a fraction of its current size and we both know what that would do to GDP and investment. Both the present and the future would be completely ****ed.

    Even trialling this system for a year would probably take the country 20-30 years to recover back to our current standard of living.
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    (Original post by Classical Liberal)
    save for long term investment.
    "Save" for long term "investment"... I think you need to google "savings" and "investment" because the two words don't fit together in this way within an economic context, which suggests to me that you might need to go away and read up a little more on introductory macro.

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