Showing posts from December, 2009


Baron Munchausen. Fantasist. Bootstrapper. Could walk into most senior economic jobs.
Me again.
The same battle of economic ideas is playing out this week as we've seen for the past few years. On one side we have conventional economists, and most politicians, saying that economies run in smooth self-correcting cycles, so the financial scare in the past year or so is now correcting and it will soon be back to business as usual.
On the other side are those who think money and more specifically debt are central to how economies work, and that economies don't self-adjust or run in smooth cycles but are like every other system in the world, in that they sometimes don't follow any sort of regular pattern at all. For these (to me hugely more realistic) thinkers, we're still sitting on the same time bomb of debt.
See for example the figures the Reserve Bank of Australia have released, described very nicely here. Australians now have more personal debt than the entire economy earn…