8 Comments
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David Gallaher's avatar

Thanks to the Christmas movie with Jimmy Stewart, A Wonderful Life, most of us are familiar with how a run on a bank can happen. That is what mobs can do.

I've long felt that predicting markets requires psychoanalyzing mobs. Very hard to do. They can do great harm or they can be dispersed.

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Cairn - mutual eye-rolling's avatar

To answer your question.

Yes.

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Peter Nayland Kust's avatar

It does seem rather unavoidable at this point. All the sins that were papered over in 2008 are coming to the surface again.

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Edwin's avatar

"Is the global financial system about to break yet again?"

PNK, is it being manipulated to a purpose since it appears inevitable?

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Peter Nayland Kust's avatar

Central bank monetary policy is by definition a manipulation of the financial system(s).

Are the meltdowns intentional? That's an extraordinary claim for which there is precious little actual evidence. Far more likely constantly causing market disequilibria invariably gives rise to positive feedback loops that central banks simply cannot control.

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Edwin's avatar

Thanks for the reply.

Simple abuse then?

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Peter Nayland Kust's avatar

Essentially. One truth of economics since before Adam Smith and "Wealth of Nations" is that the visible hand of government meddling is always confounded by the invisible hand of natural consequences to actions.

It's not just that economies are self-correcting when left to themselves. It's that economies are self-correcting despite the efforts of governments and central banks to postpone those corrections.

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Edwin's avatar

BRAVO

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