Interesting stuff, and surprise surprise it boils down to this;...

Interesting stuff, and surprise surprise it boils down to this;

preceding economic boom lasting about 10 years or so

people mostly middle to lower class buying every consumer luxury, cars and houses, available on credit

peoples ability to repay credit becomes 'saturated' and can borrow no more, inflation has increased simultaneously

demand for consumer items and assets then collapses

employees of companies making goods are sacked

share prices of same companies collapse (shares also bought on margin credit and are dumped to meet margin calls)

instant massive depression.

add to this now there is deflation because there is no new credit or spending going back into the system making it even worse.

property investors feeling smug? Forget it, housing prices utterly collapse.

By the time people saw their investments and property regain even value, they were old men/women.

Which parts of this sound familiar so far?

I'm an avid punter and property owner but even blind freedy can see this developing again.


http://en.wikipedia.org/wiki/Great_Depression

http://www.gusmorino.com/pag3/greatdepression/

http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression