delicious

Gisted -- Harrison breaks the cycle down into 5 phases: #1 RECOVERY (7 yrs): After the previous crash, optimism returns. #2 MINI-RECESSION (A few months): Will typically bring calls for lower rates and tax cuts. #3 EXPLOSIVE (7 yrs): Low rates, mortgage tax breaks and loose lending terms combine to fuel speculation. Greed eventually overwhelms fear of being left off the property ladder. People con themselves into believing houses are an 'investment' rather than just a place to live. #4 WINNERS CURSE (The last 2 yrs): Wild enthusiasm for capital gains. Property must be acquired at any price cursing everyone with unsustainably high valuations. #5 CORRECTION (3–5 yrs): Mortgages default. Risk is perceived again. Banks tighten up; liquidity/credit/money dries up. Banks sell repossessed inventory at low prices. Prices are driven down. Mortgage holders who bought during the bubble now expect capital losses. Renters switch from renting into buying setting the stage for the next recovery.

"How does Harrison do it? Well, he uses an 18 year cycle. He has traced and verified the length of this cycle going all the way back to 1700. For Harrison, the length of the cycle arises partly from how homes are financed. He points out that 5% has been a normal mortgage interest rate for much of Britain's past and that 5% compounded will double in almost exactly 14 years. After a period of 14 years, property prices reach a level where prices are too high and rental yields are too low. When banks have exhausted all their tricks in finding ways to make prices look affordable, the high valuations choke off demand and once the peak is in place, the 3–5 year slide begins which brings prices back down to earth. The timeframe for the downturn is shorter because it operates on fear rather than greed. After the turn, increasing fear and bank tightening of lending terms destroys excessive valuations faster than greed built them up."

"All democratic governments maintain a tax system that milks the poor to keep the rich, rich. 'Progressive' taxes are a cover for a cruel hoax on people with low incomes. This is how the scam works..." -- Chart: 'UK Taxation History: The Shift From Land (Rent) To Labour (Wages)' http://www.flickr.com/photos/adamcrowe/4446366350

'What is the largest sector of the US Economy? it has to be the "Racketeering Sector!" We see regulations PLAYING INTO widespread racketeering in the delivery of healthcare and insurance. We see regulations WORKING AROUND legalized loopholes in the provisioning of endless (and useless) financial products. As long as racketeering remains pervasive we will draw down on our future prospects in terms of freedom as well as wealth. We need to design our society-culture-systems so they are free from the forces of racketeering.'

'"The time has come for our ugly, intolerant rhetoric to step into the 21st century. Our disgusting, dehumanizing slurs simply must reflect the terrifying new global society we now live in."'

On that 'The Spirit Level: Why More Equal Societies Almost Always Do Better' book that's doing the rounds -- 'Wilkinson has numerous solutions, previously discussed at Starbucks, of varying levels of efficacy or insanity, depending: #progressive income and property taxes [Land Tax? or shall we continue to punish everyone who actually works for a living?] #good labour law, protection of union rights [Got savings? Got capital? Got businesses? Got investment? Got jobs? Take a look around.] #more generous pensions [Yes, that'll keep the Baby Boomers happy until we Solyent Green their greedy asses and feed them to our compost heaps.] #higher minimum wages [Have we learnt nothing? Go right ahead and make it even harder for small businesses to get their start.] #ceiling/maximum wage [Oh that's right, because wealth is a fixed pie and anyone who dares to expand it should be shackled for the 'capitalist' crime of causing a little bit of envy (aka inspiration)]' -- OBVIOUS MARX IS OBVIOUS

'Many EU countries are facing a form of bankruptcy. The EU will demand "austerity" that cannot be achieved without a quick and wrenching descent into virtual poverty. In the past, countries could have devalued, but even with IMF programs, countries in trouble cannot devalue if they are inside the EU. ...countries devalue because otherwise governments topple and people riot. Brussels Euro-crats are basically asking certain Europeans to virtually beggar themselves if there is no devaluation to be had. It is one thing to plunge into poverty over a series of years while spreading out the pain. It is another thing to have it happen in a consolidated fashion. Right now Ireland, Latvia and others are facing years of protracted poverty as a result of their EU bargains. Yes, money may still be had at a cheaper level than otherwise, but how many can afford to borrow without a job – or with several low-paying jobs that only barely keep a roof over one's head?'

'...the Democrats in Washington are literally willing to blow up their own party to pass a nationalized health care bill ...the Obama administration will doubtless try to accomplish what the previous administration could not. It will continue socializing American society with the brute force of the federal government and it will do its best to tear down the border between America and Mexico. The Fabian Society suggested in the early 2000s that the 21st century would be one of extreme "change" that people might find uncomfortable. In such an environment, [they] suggested that those who would adapt most effectively were those who would accept the changes quickly and without fuss. ...it is fairly clear the power elite operated in the 20th century under a determined veil of secrecy. But that veil of secrecy exists no more. Did the power elite plan to rip this veil away? No, no, no!'

'We have a world which seems familiar consisting of the remnants of the old failed system, and a new economic structure that will form in the distance. The US at this time does not have a strategy, public policy, physical resources, or infrastructure to be well positioned for the new world we are moving into. Instead we have corporate grabs for money from manipulated government programs spanning from our prison system, healthcare, transportation, and finance. What happens when purchasing power between currencies adjust to levels that realistically reflect future prospects and positioning.'