I had to go to the dentist this morning, which took me right past the European Central Bank. There are still a large number of “Occupy Frankfurt” people camping out, despite the near-freezing temperature over night, protesting the mess that we are in.
I have just read “The Greatest Crash: How contradictory policies are sinking the global economy” by David Kauders (it’s only available on the Kindle at the moment, I think). It’s worth reading.
David Kauders takes a fresh look at the possible cause of the economic crisis and argues that it is a massive credit bubble (like the housing bubble in the USA that burst a couple of years ago) that has been growing since the early 1960′s and is now starting to burst. The bubble has been promoted by western governments, (democracy encourages politicians to take the easy way out and expand the amount of credit available when there are economic difficulties), and we have now reached the point where no one – neither governments nor private individuals and industry – can afford to take out more credit.
He thinks we are going to experience a generation (30 or more years) of fiscal deflation while everybody tries to pay back the debts they owe, and puts the blame for the mess squarely on the politicians of the western world, and not on the banks.
An scary but interesting and plausible read.