In that case I think you may need to go on a ‘registering whats happening around me’ course.

I’m not disputing that it has been happening, but there’s a question over how long it can continue to happen.

Absolutely agree with you Molly. But you’re trying to attribute logic to people (and a system they’ve created) who’s limitless greed blinds them to everything, even when its ultimately self-defeating

Don’t think so. It’s in everyone’s interests to grow the economy overall.

I’m not disputing that. But whats in question here is how the proceeds of that economic growth are distributed. And the post-war consensus that we, as a society, all benefit now looks pretty ridiculous.

For a long time now there has been no real-terms income growth for anyone other than those at the top, who have seen their ‘earnings’ head into the stratosphere. Our real incomes are genuinely contracting, year after year, unless your bloody lucky! Or one of those at the top

The present system is ****ed, and serves the interests of an ever smaller group at the top. Just look at the escalating inequality in our society. IMHO it seems that western economies are being run exclusively for their benefit

And the post-war consensus that we, as a society, all benefit now looks pretty ridiculous.

Really? Compare today to post-war society. We might still be as close to the breadline as ever, but look at what 1940s luxuries are now normal.

Binners for PM. 😀

Molly…. Economic growth – post war – did indeed benefit everyone, and raised living standards for everyone. Right up until we had the joy of thatcherism foisted on us. It then stalled, the income gap started to widen rapidly, with average peoples wages stagnating, then effectively going into reverse! We’re having those hard won gains eroded year on year. We’re going backwards! Nu Labour tried to artificially cover up this stagnation with tax credits, and fueling ‘economic growth’ that was just a credit fueled property bubble.

Meanwhile rewards at the top…. Boardroom pay, bankers bonuses etc have rocketed off the scale, despite bearing no relation to actual economic performance (witness state owned RBS paying £600 million in bonuses, despite recording billions of pounds in losses.

As you yourself noted, its a totally unsustainable economic model. But then we should be used to those by now 🙄

When does this bubble burst

Best not to think of it as individual booms/bubbles and busts/bursts. Rather as several booms/busts superimposed on each other. Some of these cycles are obviously interdependant.

So at any point in time there might be several factors proping the share prices up, and several supressing it. So at the moment they’re squeezed between investors not investing in bonds and spending all that QE money and the oposing forces of the economy being f****d. Take away those upwards forces (bond rates going up, QE being recalled) and it’d drop, or the economy might recover, that recovery at some point will be temered by QE being reversed or bond rates going up.

The trick Mr Osbornes got to pull is pushing up the market just enough that it doesn’t hit rock bottom, but not so much that it slows down the eventual recovery. What a lot of people are calling for is a lot more pushing by ‘investment’ (aka borrowing), but his oppinion is that this will just shaft the evetual recovery as any recovery will just go into paying off the debt (if he borrows a billion now, that’s a billion more + intrest in taxes to take in at some point when there is a sign of recovery). Just look at Japan in the 90’s for an economy that never recovered.

Hmm.. but you have to ask yourself if the economy in 1979 was sustainable. I’m no Thatcherite, and I was only 4 at the time, but as I understand it things weren’t exactly peachy were they?

but the country has run out of credit.

Not at all. The government has decided it doesn’t want to increase it’s debt – would be very easy to borrow more if we wanted to.

Molly…. what on earth has that got to do with anything? I don’t think anyone wants to see a return to the 70’s. But it’d be nice if we could stem the ever increasing divide between the incomes of the few at the top and everyone else. And maybe have a more even distribution of any economic growth. In case you missed it, its not very positive for ‘society’, if indeed you’re one of those who believe such a construct actually exists.

Economic growth – post war – did indeed benefit everyone, and raised living standards for everyone. Right up until we had the joy of thatcherism foisted on us

[video]http://www.youtube.com/watch?v=MuyCRsxlFOc[/video]

Well, trying to be historical rather than political here – was it not the case that the pace of improvement in living standards for the common man was in fact unstainable and the 80s had to happen eventually in some form or another?

Well – I say 80s, I don’t mean the wholesale destruction of industries and communities..

Binners is right (IMO). One of the favourite rants of my ageing ex-company director father-in-law is how modern corporate governance has completely lost touch with reality and how back in his day, an acceptable ratio of pay between the top and bottom in an organisation was something like 7:1, whereas now multiples of 20:1 are commonplace even in smallish organisations. The whole ethos is morally bankrupt, devoid of any real comparisons of ‘value’ between the top and bottom, and is economically self-defeating.

The tragedy of the whole thing is that in the past the disadvantaged would have risen up to redress the balance but now can’t because they have no politicians who will represent them, no unions who will fight for them, and no communities who will band together and support them. I guess you have to take your hat off to the capitalists and congratulate them on a job well done.

I can imagine some kind of non-party political movement would be a good idea. Just to point out to people how things could be better if we looked out for each other a little better…

When does this bubble burst and what will be the trigger?

I’ll take a guess at….. Cyprus!

Give it a week or so and it will be a buying opportunity. Luckily I did a stealthy redemption and a bit of switching to cautious funds at the end of last week. 8)

Have you bought shares in Gazprom? As it looks like they’ll own Cyprus by lunchtime 😉

nope cyprus has left Russia so no deal thereNice picture as to who is most in trouble

Dobbo – Member
When does this bubble burst and what will be the trigger?
I’ll take a guess at….. Cyprus!

Hoi, Dobbo – attribution please!!!

teamhurtmore – Member
Perhaps the desperate situation that Cyprus finds itself will be the actual catalyst, rather than Italy, in the next wobble?
POSTED 2 WEEKS AGO #

😉 Without downplaying the seriousness of the situation in Cyprus (see other thread), I have been looking for a pull back. Italian banks as distressed calls in a weeks time?

European banks shares are actually only down 5% on the week, with Spain (valued higher) suffering worse than Italy (down 4%, lower valuations). Unicredit almost back to 0.3x book value – a brave punt if it goes below that level?

The fact that the markets appear to be in denial is a pointer that events will ambush them and there’ll be some catching up to do.

Sorry THM, missed that, and it was tongue in cheek anyway!

I think the markets are expecting a resolve as always seems to happen at, or, in the case of the Fiscal Cliff just after the deadline. This one is going to the line, and even a resolve won’t be the end of the matter when the banks open and the next phase kicks in.

The government has decided it doesn’t want to increase it’s debt

But Mr Osbourne has decided that an overheating housing market could be the answer to our dreams! Though where that money will come from is anybodys guess if we’re not increasing debt. He didn’t sound like he had a coherent plan when on the Today programme yesterday.

Maybe spending that money (that we don’t have) on infrastructure would be a better use of resources. Proper social housing, owned by the people (local councils) would help. I remember my dad being a little bitter about the spending power of council tenants in the late 70’s compared to his as a house owner. The nation was suckered into thinking owning your own property was the best thing to do in the 80’s and it’s now biting us extremely hard.

I understand not a single word that has been typed on this thread. I’d love to understand what the **** is actually going on and what all your jargon means.