Comments on: Dubai: Subprime state

By: Bored

Bored — Tue, 01 Dec 2009 21:25:45 +0000

TS, it seems obvious to me that you have a mechanistic viewpoint, purely materialist. A world view where there is nothing that might not be enumerated, classified and linked to a transaction. Its the picture common to Marxists and market fundamentalists, we are only units of consumption entirely self interested. Very sad, no free will and human spirit, merely self interested transactions, in your case labelled a “market”.

As an aside, I am a keen gardener, I grow plants and harvest their seeds. In your terms I am part of a symbiotic market, the transaction is that I harvest and replant, the plant gets to grow rent free on my patch of micro biotic biomass, which I have (in a self interested way) seized from my fellow man through some pecuniary process. We are an internal market. Hurrah!

By: Pascal's bookie

Pascal's bookie — Tue, 01 Dec 2009 17:51:24 +0000

After all, you did say “markets’ without qualification.

Don’t be knob. I was responding to this:

It is working to the extent that it is artificially pumping up asset prices through the carry-trade on the US dollar and the like. If you factor in the decline of the US dollar, for instance, the S&P500 hasn’t grown in real terms since about July, even though the US stock market appears to be roaring ahead. So, the US are basically inflating themselves into oblivion. It is a really fine balance the Fed has to tread to avoid the US becoming another Zimbabwe.

That is what I was talking about. And the fact that you linked me to a an interesting, but very financial and equity market-centric, website.

Markets as you describe them a re necessary in some form for an economy, but they are not the same as the economy. Any more than a cardio vascular system is the same thing as a person.

By: tsmithfield

tsmithfield — Tue, 01 Dec 2009 17:08:22 +0000

Bored, from the very widest perspective the activities you describe are also part of the market. Consumption drives demand which drives the need to make things.

If someone gives you some seeds and you grow and eat the food yourself, then you have not engaged in the market. The moment you buy the seeds, then you are part of the market. Therefore, market=economy.

By: Lew

Lew — Tue, 01 Dec 2009 09:27:07 +0000

Financial Year Zero.

By: Bored

Bored — Tue, 01 Dec 2009 09:17:55 +0000

TS, I have said before you should read a little more, your world view is incredibly narrow. As for markets, they are an important abstract in our current economic system, they may even approximate real transactions taking place. Markets dont physically make things, they dont actually consume, these too are components of economic activity distinct from a market. To ascribe markets with being the entire economy is to give an abstract a monotheistic position. If you have not done so already with your faith in markets you would do well to become one of those occultist fortune tellers and interpreters of chicken guts that as a profession call themselves economists.

By: tsmithfield

tsmithfield — Tue, 01 Dec 2009 08:07:57 +0000

Pascal “For real? Serial?

Surely you’d agree that the financial markets are a part of the economy.

If so, necessarily, to use them as a proxy for the economy in total, = fail.”

I meant markets in the widest sense, as developed from the days of bartering etc, not just the financial markets. Do you agree that, in that context, the markets are the economy? Think about it. Even an employee is engaging in a market function of exchanging their labour for money. I stand by what I said. The market is the economy.
After all, you did say “markets” without qualification.

By: Quoth the Raven

Quoth the Raven — Tue, 01 Dec 2009 07:19:23 +0000

I agree. Just that I got the criticism from the Austrians.

By: Pascal's bookie

Pascal's bookie — Tue, 01 Dec 2009 07:18:19 +0000

For real? Serial?

Surely you’d agree that the financial markets are a part of the economy.

If so, necessarily, to use them as a proxy for the economy in total, = fail.

By: tsmithfield

tsmithfield — Tue, 01 Dec 2009 06:59:54 +0000

If the markets aren’t the economy, then what is?

By: Draco T Bastard

Draco T Bastard — Tue, 01 Dec 2009 06:41:16 +0000

I’ve been criticising the fractional reserve banking system for a few of years. Anybody who actually thinks about it and holds it up to some logic must come to the conclusion that it’s completely delusional.

By: Lanthanide

Lanthanide — Tue, 01 Dec 2009 06:30:39 +0000

http://www.dubai-architecture.info/DUB-GAL1.htm

By: Bored

Bored — Tue, 01 Dec 2009 05:23:09 +0000

Read Kunstler.com this morning on this very subject, very illuminating.

By: Draco T Bastard

Draco T Bastard — Tue, 01 Dec 2009 04:46:15 +0000

I’m quite aware of that and I had thought about it. My conclusion was that most people, living at subsistence level and therefore with little or no savings, wouldn’t be adversely affected. After all, they wouldn’t actually lose anything that they had.

Anyway, I said that was the best they could have done – I didn’t say that it would ever be done.

By: Pascal's bookie

Pascal's bookie — Tue, 01 Dec 2009 04:44:40 +0000

I try not to confuse the markets with the economy.

By: tsmithfield

tsmithfield — Tue, 01 Dec 2009 03:43:05 +0000

If you want to get a good, diverse range of commentary on all these sorts of issues, I suggest you have a look at:

http://seekingalpha.com/

The real debate is, is it actually a good thing to bail out the world economies, or would it have been better in the long run to have let them fail and start again a-fresh and endure some long-term pain for the next couple of decades.

The current attempts to rescue the world economies is just going to lead to more asset bubbles in the future. In fact, Bernake seems to accept this as the necessary consequence of cleaning up the current mess.