Much of the inflation at that time, came from a low level of leverage to, meaning interest rates were much more effective. But that mechanism is also present today, in emerging economies, indirectly driving inflation in our countries, without the wage price spiral.

I think gold have increased from 250-300 to 1000 USD, now down to around 800 USD. Real estate have increased far less.

I think that means that house prices in the last boom maybe have went down in real terms, not up, especially in countries with collapsing currencies that have lost 40 % against USD or YEN like Australia. Meaning that the boom from 2003, actually deflated the last boom through inflation. Maybe this trend will go on in the future. A nominal rise in house prices, but still a decline in real terms compared to gold.

The reason is that real estate seems to track the metal gold. Gold is still going up in AUD terms. Down in USD, but not in AUD.

I think this relationship with gold and real estate holds in a way that means that the house price inflation from 2003, actually strange as it sounds, was a deflation of the house price bubble from 1996-1997, after house prices started rising in 1993. This is also confirmed by looking at oil and other “hard assets”. Now I am waiting for the 0 % rates, and the wave of inflation as bonds sell off.

Control of population growth is where our focus should be and creating a new economic system that does not rely on year-on-year compounded growth, so as to achieve a truly sustainable society.

The factors above are destroying this planet faster than the absurdity of a deleterious impact on the climate system due anthropogenic CO2 trace gas emissions.

As a control systems engineer, where my area of expertise is in the mathematical modeling of non-linear dynamic multi-variable control systems, I can not easily accept what the climate change lobby is attempting to portray as fact.

There is still debate in the scientific community regarding the accuracy of these models. It is not difficult to string together a few mathematical models to give you anything you want to see, if you try hard enough.

The non-linear dynamic nature of the planets climate system, having known and unknown positive and negative feedback loops, linkages and couplings, which are still not well understood is far far more complicated than the climate models that are being used by the anthropogenic climate change community.

I’d rather believe in what the geological history tells the scientific community than on some questionable mathematical models being put forward as fact.

Climate change is a fact of life, it has always been with us, we only need to look at the earth’s geological history for that. However, it does not infer that it is changing because of anthropogenic CO2. There are other influences some known and certainly others unknown that have influences on the climate system, examples, variations in solar output and oceanic cycles.

Delusional psuedo-science is not apparently restricted to only neo-classical economists.

P.S.

Just as an example as to why I don’t accept the anthropogenic fear mongering:

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/11/16/do1610.xml

It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting.

Control of population growth is where our focus should be and creating a new economic system that does not rely on year-on-year compounded growth, so as to achieve a truly sustainable society.

The factors above are destroying this planet faster than the absurdity of a deleterious anthropogenic impact on the increase of CO2 trace gas in the atmosphere.

As an control systems engineer, where my area of expertise is in the mathematical modeling of non-linear dynamic multi-input, multi-output control systems, I can not easily accept what the climate change lobby is attempting to portray as fact.

There is extensive debate in the scientific community regarding the accuracy of these models. It is not difficult to string together a few mathematical models to give you anything you want to see, if you try hard enough. With the non-linear dynamic nature of the climate system with it’s

This delusion is not apparently restricted to only neo-classical economists.

P.S.

Just as an example as to why I don’t accept the anthropogenic fear mongering:

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/11/16/do1610.xml

It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting.

carbonsink, control of population growth is where our focus should be and creating a new economic system that does not rely on year-on-year compounded growth, so as to achieve a truly sustainable society.

The points above are destroying this planet faster than the absurdity of a deleterious anthropogenic impact on the increase of CO2 trace gas in the atmosphere.

As a control systems engineer, where my area of expertise is in the mathematical modeling of non-linear dynamic multi-variable control systems, and having been trained in the scientific method I can not easily accept what the climate change lobby is attempting to portray as fact.

There is extensive debate in the scientific community regarding the accuracy of these mathematical climate models.

It is not difficult to string together a few mathematical models to give you anything you want to see, if you try hard enough.

With the non-linear dynamic nature of the climate system with it’s unknown number of positive and negative feedback loops, linkages and couplings, these global warming fear mongers are relying more on voodoo than science.

I’d rather believe in what the geological history tells the scientific community than on some questionable mathematical models.

Delusional pseudo-science is not apparently restricted to only neo-classical economists.

P.S.

Just as an example as to why I don’t accept the anthropogenic fear mongering:

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/11/16/do1610.xml

It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting.

carbonsink, this is precisely what the Rudd govt. is doing right now with the $10 billion plus the $300 million injection.

The $10 billion has been handed out to that part of the community that has the greatest propensity to consume, ie, pensioners and the low income earners.

The govt. is putting money straight into their hands of those that will spend and hoping, praying, that they will go out and spend it to prop up the collapsing aggregate demand.

However, the low income earners who are also debt slaves will probably pay down their debts and hoard the rest, thus no demand side stimulus from that part of the community.

The next part of Rudd’s ‘Hail Mary’ is to get their recent $300 million stimulus to local govt. around Australia, where they will as quickly as possible start to inject the money into their local economies, and thus spread the stimulus across the entire nation.

Local govt. will spend this stimulus on projects that do not have a long lead time til implementation, as compared to infrastructure projects that typically have long lead times in the order of years.

The governments fiscal stimulus will be dismally insufficient to fill the decline in the GDP as a proportion of debt based consumption.

However, it is not only debt based consumption that is in deep decline, corporates are cutting their capital expenditure, and with commodity prices having collapsed this will put a stop to export income flows as volumes are now declining, as well as, price declines early next year when contracts are renegotiated.

The RBA will be constrained with monetary policy as the AUD crumbles, i.e., further reductions in interest rates is debatable given they may need to further defend the currency, since their open market operations have not been successful and their international reserves will be insufficient.

The Rudd government with the RBA are certainly seeing some really scary scary numbers.

They are attempting to curtail the deceleration in the velocity of money through this process, but it’s just not going to be sufficient.

http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers

So it’s way worse than their government makes out.

Even our RBA is yet again talking up the economy to boost public confidence instead of telling them what’s really happening.

http://www.news.com.au/business/story/0,27753,24675554-462,00.html

- Ernie.

Capitalism is unlikely to change for a long time to come. Even though it has been trashing the environment for a long time (since the inception of markets, accelerating with the industrial revolution), the problem with what we call capitalism is two-fold.

First is probably the most obvious that people can see: corporations. They are state-charted institutions that are undemocratic and totalitarian in organizational nature. Its executives, even if they do care about the environment and other important matters, are placed under extreme pressure to maximise short-term profit regardless of the consequences. Combine that with their control and influence over governments, their “rent-seeking” has enormous costs to the taxpayer, society and individuals. Essentially corporations are legally obligated to act like a sociopath to make money for those who already have more than they need.

Australia is a fortunate nation where we have somewhat strong protection of the environment, labour, the poor, etc. However, Australia is one of the few countries in the world with such protection, along with the other Western countries.

The other major problem is the theory that drives public and private economic policy: neoclassicism. As Keen has shown, it is rather pseudoscientific in nature, and is about as useful as an astronomical model of the solar system with the sun, moon and gravity missing. Even if a new brand of economics that truly understood markets was to be developed tomorrow, corporate power couldn’t much care less about it.

“Capitalism’s biggest political enemies are not the firebrand trade unionists spewing vitriol against the system but the executives in pin-striped suits extolling the virtues of competitive markets with every breath while attempting to extinguish them with every action ” (p. 276).

Rajan Raghuram G. and Luigi Zingales. (2004). Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity

The consumption of oil is a driver in defiling the environment. A good example of this is the cost of petrol: it’s mis-priced by a factor of 5 to 15, when its externalities are factored in. http://www.icta.org/doc/Real%20Price%20of%20Gasoline.pdf

One of the delusions that big business and its pet economists have cast upon society is that corporate capitalism = a genuine democratic market system. Nothing of the sort. A well functioning market system is more than just stuffing more dollars into the wallets of the average worker. A democratic economic system is about subordinating the profit motive to worker democracy – an end in itself. The various economic schools of thought don’t much deal with the concept of economic democracy. Marxism appears to deal with some of it, but I don’t think anyone would want to live under the system it proposes.

I wonder what Steve’s position is on corporate power, given that we already know what he thinks about conventional economic theory. What do you guys and gals think about it?