Dispassionate
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... and the answer to excessive risk-taking is to let 'em fail!
Discuss!
Discuss!
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Capitalism without failure is like religion without sin
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Dispassionate
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Does the froth from excessive risk-taking always have to be blown off?
Dispassionate
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Lightning McQueen
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Which would you rather have, capitalism with all its faults or go back to feudalism with the elite owning all the capital and no profit being retained by the masses or a stalinist style system where everything is owned by the state.
Economic busts are a requirement of the capitalist system to keep the whole pyramid scheme from blowing up, I don't think enough money could ever be found to pump into the bottom of it to keep everything going up indefinitely, busts are a must. Also used to redistribute the capital up the chain to the elite. (where's fibo for a tasty conspiracy link
)
Lightning
Economic busts are a requirement of the capitalist system to keep the whole pyramid scheme from blowing up, I don't think enough money could ever be found to pump into the bottom of it to keep everything going up indefinitely, busts are a must. Also used to redistribute the capital up the chain to the elite. (where's fibo for a tasty conspiracy link
)Lightning
Dispassionate
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Which would you rather have, capitalism with all its faults or go back to feudalism with the elite owning all the capital and no profit being retained by the masses or a stalinist style system where everything is owned by the state.
Economic busts are a requirement of the capitalist system to keep the whole pyramid scheme from blowing up, I don't think enough money could ever be found to pump into the bottom of it to keep everything going up indefinitely, busts are a must. Also used to redistribute the capital up the chain to the elite. (where's fibo for a tasty conspiracy link
Lightning
Can't the froth be blown off in an orderly manner?
Dispassionate
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Lightning McQueen
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I suppose that's what the powers that be are trying to achieve at the moment, quite obveously with mixed results, I for one am hoping for a gentle, orderly defrothing
I suspect that gentle and orderly is the difficult bit and a busting of all markets is the only surefire way to reset the game.
I quite like it ian, I used to have an animated gif also, I don't believe they're allowed anymore, I suspect for the reason you state, ah well.
before discussing the title we should give correct attribution...in this case Alan Meltzer.
'capitalism' requires risk taking...this is the exploration of uncertainty that might lead to a positive outcome.....
'heathy' risk taking presupposes that the positive outcome will be enjoyed by the risk taker to a great degree and to a lesser degree by non-participants ( businessman and employees , investor and others in society that may interact economically with the investor). In a sense this is the underpinning to what we mean when we link risk and reward in that he who risks most should enjoy the higher slice of the reward and vice versa.
'unhealthy' risk taking presupposes that the risk taker may experience the negative outcome to his venture in a disproportionate way..that is he suffers little ,or no loss while the loss to a greater degree is dispersed amongst the non-participating population (tax payers etc , options management who back date in the good times ,but take no loss in the bad etc etc)...this undermines what we believe about associating risk with reward.
To proceed with 'unhealthy' risk taking is akin to me leading a life of sin and debauchery whilst the rest of you faithfully abstain and attend you local place of worship and then at the penultimate hour of my demise I fall to my knees and cry...Lord I'm a believer!
In basic yorkie terminology we called this variously 'having your cake and eating it too' ,or 'having your bread buttered on both sides'...
'capitalism' requires risk taking...this is the exploration of uncertainty that might lead to a positive outcome.....
'heathy' risk taking presupposes that the positive outcome will be enjoyed by the risk taker to a great degree and to a lesser degree by non-participants ( businessman and employees , investor and others in society that may interact economically with the investor). In a sense this is the underpinning to what we mean when we link risk and reward in that he who risks most should enjoy the higher slice of the reward and vice versa.
'unhealthy' risk taking presupposes that the risk taker may experience the negative outcome to his venture in a disproportionate way..that is he suffers little ,or no loss while the loss to a greater degree is dispersed amongst the non-participating population (tax payers etc , options management who back date in the good times ,but take no loss in the bad etc etc)...this undermines what we believe about associating risk with reward.
To proceed with 'unhealthy' risk taking is akin to me leading a life of sin and debauchery whilst the rest of you faithfully abstain and attend you local place of worship and then at the penultimate hour of my demise I fall to my knees and cry...Lord I'm a believer!
In basic yorkie terminology we called this variously 'having your cake and eating it too' ,or 'having your bread buttered on both sides'...
fibonelli
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Which would you rather have, capitalism with all its faults or go back to feudalism with the elite owning all the capital and no profit being retained by the masses or a stalinist style system where everything is owned by the state.
Economic busts are a requirement of the capitalist system to keep the whole pyramid scheme from blowing up, I don't think enough money could ever be found to pump into the bottom of it to keep everything going up indefinitely, busts are a must. Also used to redistribute the capital up the chain to the elite. (where's fibo for a tasty conspiracy link
Lightning
Hi LQ and all believers,
Feudalism - alias American Capitalism
http://mypage.uniserve.com/~synergy/welcome.htm
The book is US centric but my view is that it's very applicable to the UK. You can read it online or download as a zip file.
A Privatised Money Supply
http://www.basicincome.com/basic_banks.htm
No discussion of feudalism or capitalism can be made without understanding the money creation process.
I'll go for capitalism any day, but that is because I live in the capitalist part of the world that is worth living in. I visited India a lot in my travels and I do not know, to this day, why that country never went communist. There was so much misery there that I cannot see what they had to lose. Whether we like to hear it, or not, we have been robbing all such countries of their wealth for centuries. That is why capitalism works so well. The US has convinced the world, until now, that the almighty dollar is the only currency worth having and have been selling their debt abroad in return for commodities. Now, the debt is so enormous that the system is toppy.
Anyway, as the passenger on the Titanic said, " We are going down, but I'm going first class"
I follow another saying
" The system's lousy and it deserves to change but.......not just yet"
Split
Anyway, as the passenger on the Titanic said, " We are going down, but I'm going first class"
I follow another saying
" The system's lousy and it deserves to change but.......not just yet"
Split
Rhody Trader
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I would actually define risk as healthy or unhealthy by how much attention is given to it by those taking it. Unhealthy risk comes about when the risk taker is focused almost exclusively on the reward side of the equation. They either don't realize how much risk there is, or they downplay it.
Healthy risk taking is considered risk taking.
Rhody Trader
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It strikes me that societies are predisposed toward or away from certain types of governing. I'm no sociologist, though, so I have no research upon which to base that idea.
I've never been to India. I do have friends with ties, either directly or indirectly with that country, but my knowledge of that country is limited. Based on their religious focus, though, they strike me as more individually oriented than say the Chinese. As such, Communism probably isn't that appealing.
Risk taking is a curious concept. On an international level, look at how China has taken on Western debt in order to become a major economic power, while the West has sold its debt to China and other nations so as to maintain its standard of living. In the beginning, this risk seemed to be, equally, beneficial to both sides. What about now, though? The US, in particular, has an enormous amount of debt abroad. One way to reduce some of that is to devalue. America has, often, used this method, and is doing it today. Are the Chinese worried about the devaluation of the debt that they own? Who, would you say, is carrying the greater risk?
Split
Split
China has over a trillion in reserves and, yesterday, announced that it was looking to invest some of it abroad. America cannot do that so easily, now, because its currency is losing value.
If they were to do that, I would think that a revalued currency would suit them better and they would start to assume some of the power that has been enjoyed by the US.
As their currency is pegged to the dollar they are not going to like the devaluation of it.
To buy abroad, a country needs to have a strong currency, which it has, but it is artificially low. Should we be buying Yuans?
If they were to do that, I would think that a revalued currency would suit them better and they would start to assume some of the power that has been enjoyed by the US.
As their currency is pegged to the dollar they are not going to like the devaluation of it.
To buy abroad, a country needs to have a strong currency, which it has, but it is artificially low. Should we be buying Yuans?
China is not the only one in this equation.
with high oil prices over the last years, Petrodollar Reserves are MASSIVE too!
remember reading they probably were even larger than China's (source Morgan Stanley's Global Economic Forum)
The risk spread on china is larger than the US. Let me put it this way. If money contracts at this time you will see more volatility on investments in china than you will on investments in the US which is why you would allocate your assets accordingly.
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