Debt, unless controlled, has more or less been the culprit of every bubble. If not it at least exacerbates the damage when the bubble pops. I've often speculated there must had been some climatic event that prompted Mohammed to ban the use of debt in Islam, much in the way I theorize that STD's and abandoned children wreaked such havoc upon society that marriage and monogamy were engrained in pretty much all religions.
So I was glad to see so much debt being used in the US today. Actually, it's probably a LOT more in that this chart only goes to 2002 and doesn't include all the idiots using ARMS and NegAm's to buy their houses.
And some other good news. Got a lot of charts sent to me for the competition. Actually, none of them were charts. They were links. But just a little bit of advice for all of you participating in Captain Capitalism's Annual Chart Contest;
DON'T SEND ME LINKS TO CHARTS! That means I have to go and get them myself.
ATTACH THE CHARTS!
Must be a rough life, having to click a hyperlink to bring up data.
ReplyDeleteNo wonder the Chinese are kicking our butts, thanks to lazy Americans like you.
I might point out you could have learned something from mine as well, but, nope, too lazy and surly. Next thing you know, you'll want to be unionized, too.
I sent you a link to a chart because it wasn't something you could just post; it was a first-person view of a roller-coaster following housing prices over a hundred years, and frankly, it was just cool. (As a video file it would be huge, though.)
ReplyDeletehttp://www.speculativebubble.com/videos/real-estate-roller-coaster.php
Of course, since I didn't make it, I can't claim credit anyway.
That's a very intersting post-- postulating that debt, or buying on margin, has a causal relationship to depression. However, i disagree that the correlation still holds. The Great Depression lacked several of the institutions that are now in place (the FED, regulatory institutions for companies, re-insurers, and infinitely higher computing power). The so called "Great Moderation" has occured for a reason...
ReplyDeleteSecondly, it could be infinitely more interesting to postulate how much investment has been stymied by this enormous debt, and what could have been produced by this "missing" investment. How about a greater social safety net of education for starters?
Oh, might i ask what consulting firm in Minneapolis you work for?
Never worked for one. Was always self employed. Amazing what independent thought will get you.
ReplyDelete