Tuesday, October 30, 2007

"Central banks provide about the same social function as a distillery"

So says Bill Bonner over at The Daily Reckoning blog.

The post's great - if only for a series of illustrations like that in this posts title. Its about how easy credit has made us stop thinking. I strongly recommend giving it a read here.

I'm not qualified to tell if Bill has it right - but it certainly looks worrying. Somehow the fundamentals of our economy just look wrong right now. We have too much debt, produce too little and have what looks like a house price bubble.

A few months ago no one could imagine a run on a British high street bank - now they can. Are we held back by a lack of imagination ? Politics is currently about optimism - so no warnings from politicians that might affect their poll ratings can be expected ( except the need for economic suicide to transfer our wealth to China and India to prevent global warming).

Today on the news I heard more warning about Housing price reductions in the UK. Something I have regarded as inevitable as soon as houses became too expensive to buy for enough people ( is it really rocket science ? ).

The denials have been out - only a 10% chance said the Royal Chartered Institute of Surveyors ( guess which side their bread is buttered ) a few months ago.

As an electorate we find it very hard to imagine circumstances other than those just now or in our recent past. That's a shame, because if we could we might be able to avoid what is coming.

On returning from our half term holidays let out a shout of amazement as I drove past a block of flats - I have never seen so many For Sale signs. Perhaps less imagination is now required.

No comments: