understanding the fire storm consuming our economic survivability-part

Views:
 
Category: Education
     
 

Presentation Description

No description available.

Comments

Presentation Transcript

PowerPoint Presentation:

Understanding the Fire Storm Consuming our Economic Survivability PART 4 Making Sense of Markets

PowerPoint Presentation:

“Boom-bust cycles are more correctly described as bubble-burst cycles. One can eliminate the burst if one can eliminate the bubble, and one can eliminate the bubble if one can obviate its cause. Prices become decoupled from earnings in a bubble and are supported only by the assumption that someone else, the greater fool, will pay an even higher price at a later stage. …”

PowerPoint Presentation:

“When that assumption loses credibility, that is, when the market runs out of greater fools, there is no support for today's prices and the bubble bursts. Bubbles cannot occur in the market for buildings, because buyers understand that the price of a building is limited by its production cost, and this tends to decline with wear and tear; …”

PowerPoint Presentation:

“there is no expectation of capital gains, nor of finding a greater fool. But bubbles can and do occur in the market for land, because land, being a gift of nature, does not have a production cost. A property bubble is a land bubble.”

PowerPoint Presentation:

“The real estate cycle could not manifest without the ability of the economic rent to capitalise into a tradable privilege. Once the cycle is created then, unless something is done to stop that rent from being freely traded as a price, the cycle will repeat.”

PowerPoint Presentation:

“Real estate cycles have been with us for more than two hundred years now. They have repeated in times of inflation or deflation, whether the US economy was experiencing high interest rates or low, with trade barriers or with free trade, with government subsidies, high taxes, low taxes, or even no taxes at all. The only constant element in all the cycles has been a so-called ‘collective land monopoly’.”

PowerPoint Presentation:

END OF PART 4

authorStream Live Help