I was reading a piece on Japan and what went wrong. It was saying there was more to it than the late 80s bubble bursting, though exactly what I don't know, he trailed off. I had lost interest before hand too, with one comment he made....that the lehman brothers collapse couldn't possibly have damaged the entire world economy, that it was oil prices reaching record highs which obviously really did it.
This is new to me so I googled and....it seems to be quite a common theory- albeit amongst nobody reputable.
Just what is the thinking behind this idea? Who are its pushers and what do they stand to gain?
I assume its the free market nuts who want to keep leaving the banks to do their thing?
Anyone know anything about this?
Commodity prices are generally very high and have been for some years. In former times a recession would lead to those prices falling which would help the future recovery. This time round, as countries like China continued to grow and industrialise, there has been no real fall in commodity prices - which is holding back the developed world's recovery.
Think back to the mini-recession of 2001/2 (not 100% sure of the precise dates), the oil price collapsed to below $20 a barrel, which greatly helped the recovery.
Oil prices are a big factor in the lack of recovery, not in the crisis origin.
According to Santorum, it was the high prices of summer gas that led to the mortgage defaults.
Even I know better then that.
Quote from: Razgovory on March 11, 2012, 10:35:45 AM
Even I know better then that.
Than to listen to Santorum? I should hope so.
Agree with Iorm. Lack of oil and food will lead to dieback, but it's pretty laughable to think they caused people to overvalue houses and derivatives thereof and loan money that wouldn't be repaid.
How much of a factor is it with oil traded in US dollars, and the dollar losing value, that the price of oil has gone up because of that? For some years now, since the Bush admin and maybe before, the US dollar has been losing some of its value.