The Stock Market Week From Hell

"The Masters Of The Universe Were Wrong Too"

It depends which economists you chose to listen to!

If you chose to listen to Keynesian school economists they were all wrong.

If you chose to listen to Austrian school economists, they were bang on right.

... and we are still not listening to those that got it right .

Gold standard or doom. But we won't go back to the wisdom of our forefathers. We have lost the collective historical memory of sound money.

Convulsions in western bourses are merely symptoms of how economic leadership of the world is heading east of Riyadh.

G7 countries now hold half as much foreign currency reserves as the combined forces of China, India, Russia and Brazil. Sovereign wealth funds can pick up cheap, convalescent financial assets in London and NYC and will assume control of our economies... by the same power that Natty Rothschild and his brothers or Barings once wielded over European governments.

Between 1972 and 1987 equities on the LSE showed no real gain in value. Since 1999 we have suffered net, post-inflation losses in ordinary shares, those vaunted "only long-term stores of value". Only in the Nineties, the post-Cold War interlude of delusory consumerist and credit-addicted good feelings, did shares march forward, and that ended in the Tech Bubble.

And so we see the stock market doing its long-term job of discounting the future: the rise of the Asiatic powers and the decline of the West. The events of the past month have only been a rather ostentatious episode in a story that began when Japan was forcibly demilitarised.

As early as the decoupling of the dollar from gold in 1970, and the oil stagflation of 1973-75, the writing was on the wall for the West. We consoled ourselves when Japan stalled and communism crumbled that our way was best after all. We carried on partying on tick. Then China arose.

There is a satisfactory poetic justice in this. The trumpeters of free markets such as GW Bush Jr, and the sullen ex-socialist accomodators of globalist and City spivvery such as Gordon Brown, are now forced to nationalise, of all sacred cows, the banks!

Even FDR, Attlee, Cripps and Nye Bevan never went that far. It takes a po-mo politician to panic so thoroughly and abjectly. But if you're Brown or Bush, you seek applause for feebly trying to clean up a mess you helped create.

I've put my thoughts beyond winning or losing, i'll just continue to pay into my tracker funds once a month and wave goodbye to that money as surely as if i'd put it on the 3.15 at haydock. Time, as the old song goes, is on my side, or will it be my children that finally cash in on my doggedness? or do I lose it all due to a lack of growth due to peak oil? Truth is, like everyone else, i'm down 40% and i'm not smart enough to answer these questions, but I know that people have good-new-ideas every day and good businesses make profits and i'd rather try to be in it than out of it.

Sorry to hear about your poor health. What angers me is that I was the sensible guy, prudent in my spending, paying off the credit card in fulletc etc. I was saving for a house but I can forget about that now.

DamoMackerel and teecee90 I sympathise with you both. May I point out an obvious fact that we seem to have forgotten, a good citizen gets nothing but heartache.
You both have saved hard and invested wisely and all you get is return is......... sorry what again?
Take someone from the other side of the spectrum, one who lived off our tax money all their life and was offered a chance to buy their council house (which was bought from our tax money) using a self certified mortgage where they inflated their income and the mortgage broker never checked. Where are they now? Being helped by banks to help them pay their mortgage, the banks that the government is keeping afloat with our tax money.
We are the losers of everything. An honest earning citizen, the once who had no money still have none. The one that used our money to make themselves more money (bankers) are holidaying in exotic locations while the market cools and they can get their jobs back losing our money.

There is no solution to this. This is the society we live in, an unfair one.

Interesting read, Luniversal, apart from the last somewhat hysterical paragraphs. It's only part nationalisation and the intention, as Mr. Darling said on the radio yesterday morning, is to support the banking system until it recovers, not to run it, so citing Cripps and Bevan is completely beside the point.

But you're probably right about Western decline. I don't see how, in the long term, we can compete with the aggressive industrial and commercial expansion of China and India and probably Korea. Compared to us and the Yanks, they are so determined, driven and selfless. Not sure about Russia, though. They have the fossil energy card but that will become less important as we move towards renewables. Other than that, will they ever move beyond Putin's sabre-rattling mentality?

In response to the first comment, from AxHandle:

I am so sick of people like you.
1) Whenever a Scot (Prime Minister, sportsperson or other) does anything good, they're "British" and whenever they do anything you don't like they're "Scottish".
2) I know you didn't mention this, but I'm also so tired of everyone talking about Gordon Brown as the "first Scottish Prime Minister" - Tony Blair was Scottish too, but none of you seem to have noticed.
3) These banks needed help. Would you rather he did nothing and let the economy collapse further? You would have suffered too, regardless of the fact that the banks are Scottish.

In other words, it has nothing to do with the fact that the Prime Minister is Scottish - that move had to be made. If he hadn't stepped in, everyone would have been talking about the "Scottish" Prime Minister who didn't take his chance to save the economy. Well, he did, and I think we should all be thankful for it. Leave your racism out of it next time, please.

It still comes across as racist, because nobody would have said anything about an English Prime Minister bailing out English banks. Both ways, it's the British Prime Minister helping British banks. So what's the problem?