Niall Ferguson How bad the crisis could get - CNN 19Jan09

[gadionson1]

TALKED ABOUT CRISIS, SHOULD HAVE ABOUT SOLUTIONS TOO...

[NearAbbeyRoad]

Ferguson is a historian - should look into the history of raising taxes. Land Valuation Tax was in the Middle Ages when all was stable. The landed gentry gradually pushed taxation of land onto people with income tax making themselves super rich. Two points made the economy unstable:

1. Since taxation of land was moved onto people's labours

2. Economists 100 yrs ago, for vested interests, changed classic economics by moving LAND into CAPITAL. LAND is unique and treated likes a car (CAPITAL)

[NearAbbeyRoad]

The root cause for the 1929 and 2008 crashes was LAND. Debt after debt was poured into land because the increased values are tax free. The land dwarfed the rest of the economy collapsing taking all with it. Surplus earnings get poured into land in a boom - economists will tell you that

The solution Niall Ferguson? Introduce Land Valuation Tax. It stops over speculation in LAND. It can eliminate income tax & pay for needed public infrastructure. Look at Harrisburg, Singapore and Hong Kong

[12022304687]

Its great that the interviewer is also very well-informed; resulting in a very interesting discussion.

[poodtang1]

America's problems began when it evolved from a producing society to a consumer society.

[Phead128]

With a population that is humongous, 5 times the size of US population, I'm pretty sure if China is able to eek 1/10 a consumer case out of her mighty population, she can absorb a lot of loss of exports to US.

[lanser87]

Ok so China saves us from debt by using their money which in turn becomes our money, then we give the money back to china by buying their products? WTF?

[existentialvoid]

@lanser87 thats how it works - china needs the us market to sell all the stuff they make, and we need chinese money to kep buying their stuff. They can't pull out because it will mean the total collapse of their economy, and the us can't stop because its addicted to debt.

Chi-merica indeed.

[ItsFazsha]

18 months after this interview, let's take a look: 1. Despite a $1T stimulus, close to 10% unemployment; 2. UK, Greece, Spain, and the EU community on the ropes; 3. Brazil unemployment has dropped to 7.3% with 5.26% inflation rate, 4. China property inflation hits 12.2%, consumer price inflation hits 2.8%. We have exported inflation to countries that export to us. Gold has gone from $850 to $1210.

[09geauxtigers]

This guy is very intelligent. I've read his book "Colossus, The Rise and Fall of the American Empire". Very good piece of work. Most Americans are clueless. China has over 1 Billion people. If it could establish a sound middle class, it is very likely we will one day see the collapse of the dollar. That would be devastasting. Imagine, what Americans would do if the dollar is worthless. Mass hysteria, social upheaval, especially in the cities.

WOW!

[existentialvoid]

@09geauxtigers but thats not what is happenening - China instead has a major crisis in rising cost of labor which is snuffing out a nascent middle class and instead creating the super-rich and super-poor. ma massive 2 tiered society.

Remember, China is 4.7 trillion to uS at 16 trillion - China may have a lot of exports, but thats all its got.

[conceil8]

.

I warned you Christians, the kingdom of God is about to take over this world, prepare yourself, be holy, be like Christ.

.

[roknrow]

IQuestions for Niall: 1. What are the systems dynamics that cause currency valuation to increase or decrease?

2. Is currency to complex to be valued in a way similar to value stocks (ie. NPV of future earnings growth)?

3. When will the trend change whereby ever since 1982, stocks have been going up interest rates have been going down?

[ewrh78]

well - i make a try:

1. e.g. "IS-LM-B"P - is the name of an economic concept explaining the equilibrium of an open economy - (ivestments=savings - Money demand/supply - Balance of payments) - very complicated concept i wasn't able to grasp fully

2. Yes - extremely far more complex (besides that - NPV=not used, DCF & EVA =garbage/tea leave reading)

3. already has changed - bubble has burst (intrest will rise soon enough to try preventing hyper inflation)

[jeremyraybrown]

@ewrh78 How are we going to raise interest high enough? Our debt is primarily in short term Treasuries and the interest on that will become unpayable as interest goes up. In the 1980s we didn't have the US debt problem, low manufacturing capacity, and low or negative savings. Now we have all of that. We are in trouble, make no mistake about it!!

[britishjohn04]

He is basically making the point that it will be unlikely that China would be able to decouple itself from the US consumer. This is open to debate. Sure the Chinese people are poor but what if the Chinese government just give their products to their own people at hugely reduced prices? I guess the they could only maintain that for a limited time however. It's a very unpredicatble time...

[BensGrand]

You people are completely ridiculous. If with out economic growth and globalisation you would not be wrting those messages. and do not get me started on communism

[mrzack888]

another pro globalization shill. Neiall Fergusson is a puppet. Peter Schiff would probably have an interesting debate with this guy.

[GaiusIuliusTaberna]

Niall would rip peter schiff to shreds and bury him. Globalization skeptics are stuck in the stone age, albeit a gold plated stone age.

[mrzack888]

globalization have destroyed America fool. wake up before you wreck yourself.

[GaiusIuliusTaberna]

its "has" not "have." Sorry but I don't see the need to take political advice from someone who can't even produce a coherent sentence.

[mrzack888]

you're a little bitch that can't debate me on the content, but instead focus on grammar. you need to take my advice, cuz it seems you know nothing about reality.

[really12345]

None of this stuff is new,

Read Lenin's "Imperialism the highest stage of capitalism", or Lenin and Trotsky's "crisis, boom and revolution"

Marx's Capital is a scientific and methodical study of capital

This guy's a dilettante at best

[nzmft85]

he's a pretty eloquent dilettante

[really12345]

true dat

[jeremyraybrown]

@nzmft85 The guy doesn't even talk about the roots of the problems and how they can be avoided or fixed quickly. He only says stagnation is better then a depression. The guy is pretty clueless for a Harvard professor. His statements don't provide any insight.

[nzmft85]

this was back in early 2009. in other contexts, he has more than satisfactorily covered the origins of the crisis.