Let's start by the beginning; the creation of capital.
Capital starts at its harvest from nature.
Increases at industry, the add value.
Increases again at retail and logistics.
Basic extract 1 rock costs 100 bucks, a statue made of that rock costs 1000 and the guy at the gallery will sell it for 1500...
Between all these steps you've trade, isn't just a "Real estate sets the price" game! At each trade line prices need to be set, and those relies mostly on supply and demand. If I'm a RE agent and got 1 property to sell at a specific location for 1 million, I probably can do it, however if I've 20 properties on sale at the same location, or if the construction isn't attractive, I would be lucky to get 500k/each. In between because some trades requires good amounts of money, it usually included a bank financing it.
If at some point I start to sell them under production costs I can no longer provide enough for its industry, this cause a bankruptcy down the line, from the extraction to the builder including the bank.
"Who's to blame"? I see those "this have to have a guilty" (usually ending up with a fold guy) nothing but a waste of time. It's an economic cycle, with all and no one to blame.
Back on 2008/9, two courses of action could take place, laissez-faire and take the hit or bail it, making the hit smaller, but at short term. If the first one was bad, the second one ends up to be only apparently good.
There's a major difference between private and public business, the first one can bankrupt, the second one can't, better said, can but will drag everyone in the tidal wave. And here comes the Achilles' heel of 2008/9's action that will make the next crisis a much bigger one; States are now fragile with debt going through the roof and can't redo what they did back then.
They intended to control finances, and I don't say this isn't important, but in the economic cycle fix the finances is like trying to fix the OS when the issue comes from faulty hardware.
The solution is now a bit of a lottery; either the industry manages to somehow refresh its market and reboots or prepare to take the hit. The oil prices are an example of issues at layer 1 (extraction) caused by lack of demand at layer 2 (industry). Time will tell, anyway the rules of logic demands that we must always hope for the best but prepare for the worst.
First it was exactly an answer as such kind of answer I waited. In few words like the connection between your title of the thread and the content of your main post. So other thing is the beginning and another one the next beginning. Then is continued with the giving of data not needed (as were the first ones), jumps from concepts to concepts without following the normal logic and even totally wrong connections and perceptions which are one against another.
For example you write (I would pick only one because have no meaning to analyse all): "T
here's a major difference between private and public business, the first one can bankrupt, the second one can't, better said, can but will drag everyone in the tidal wave."
Here my interpretation of the above: First you must decide if an public business can bankrupt or not and then express this clearly. Because in your sentence first this kind of business cannot bankrupt and then can bankrupt but when do so "drag everyone in the tidal wave". The same way of expression was used in your previous post about the role of the State in the economy. Exactly the same. Nor meat and neither fish. This is the overall meaning of overall your write. To be "correct" with every possible interpretation. To not take an clear position. To have always a way to "go out" that is written. To reinterpret that. Except to criticize the government. This is clear in every moment. If I would go further with the above phrase I can tell that even this conclusion is not at all true. There is not any kind of differences in the bankruptcy of an public or private businesses.
If bankrupt two businesses with different owners (private and public) and have the same businesses data (employment, revenue, net profit, costs, share of the market etc) independently from the owner will have exactly the same consequences. The only difference is who lose the business.
Almost every sentence is followed by another which not necessarily (when has this "duty") argues the first one. Normally and figuratively are jumps form the first floor of a building to the the fourth of another building. As it is this bunch of sentences (again within the above phrase - told that will not analyse others like with this):
"There's a major difference between private and public business, the first one can bankrupt, the second one can't, better said, can but will drag everyone in the tidal wave. And here comes the Achilles' heel of 2008/9's action that will make the next crisis a much bigger one; States are now fragile with debt going through the roof and can't redo what they did back then."
Normally this bunch have meaning if could be some explanations between the two sentences like this: The state has used its money to not allow the bankruptcy of ...... and here is my question-mark; of who kind of businesses? Only public ones? If so you are in big wrong. General Motors is not a all public company. And was helped by The Government. Of private ones? The same answer.
Without going further with various interpretations (and as I told can be to many) is normal to do some questions before. Who asked such things? Why must be given those? Both us (and who may be interested to read these posts) is supposed to know what has made the Government of USA. Why must be given again these things when is supposed that here must be only your thoughts about the different solution of this crisis? Are needed in order that you give the overall argumentation about your solution? Lets agree this variant. Then let go forward accepting this supposition.
Bu what are your thoughts about the solution of the crisis of 2008? Regarding this in your post I find only one sentence (if can be taken as such and not another interpretation like those that only you are able to do):
Back on 2008/9, two courses of action could take place, laissez-faire and take the hit or bail it, making the hit smaller, but at short term. If the first one was bad, the second one ends up to be only apparently good. According to this solution the crisis must be leaved to continue (this is the meaning of laissez - faire) and then will have as a result: "
take the hit or bail it, making the hit smaller, but at short term. If the first one was bad, the second one ends up to be only apparently good."
This is the big solution.
This is the solution, according to you, of the second biggest world crisis since the creation of human kind. Given with two sentences and with a result nor meat and neither fish. Leave everything to the case. This action must be caused a much more prosperity in our days and any kind of risk for another more probable big crisis in the immediate or near future. So it was enough that the White House threw out all the advises of the Harvard minds with which was consulted at the time of crisis and then followed these two sentences given by you in your "solution of 2008 crisis" above post and in our days everything at USA and o all the rest of the world would be much, much more better not only economically but even in every other field of the life. With few words better in everything and in every aspect. I have no words to comment. Or better don't want to hurt you more with my comments.
You give even another solution about the actual terrible situation but as I told at the previous sentence I don't want to hurt you more.
I will give you (if want) below only some friendly life words. Then you can put it in the trash after the read.
If the world or even our home will be managed IN EVERYTHING using your mentality of "can be this of the opposite of this" or "can be this or that", or "can be this or almost that of this" and other this and that, in this day, me and you would be at the stone age hunting with archers in order to find the everyday feed.
Especially in time of crisis (any kind of crisis) have no place for dilemmas or suppositions but only for solutions. Any kind of solutions cannot be named such if have not action which aim to eliminate the crisis. Any kind of crisis cannot be solved itself. Or if can be the results would be, for sure, ALWAYS MUCH WORST than in the case of doing actions to stop and eliminate it. The laissez-faire is not magic. Every kind of market need always rules because in every market operate and will operate always impostors, stealers, criminals which are not at all stupids. If they will own the market (if are not rules the probability that they win is huge) the first thing they will do is to ban exactly the tool which allowed to them their status: the laisses-faire. Because this tool may serve to the others to throw away them from the status they have. This could be one of the mos probable scenarios that can happen if is given freedom without rules. This about the laissez-faire seen by you and to many others like economic magic tool.
As for all everything else in our threads I will end here. Don't find more interesting to discuss about this topic here. You can continue with your posts commenting everything written by me or other things because is your thread. But don't forget that much more hard (and some time even impossible) than destroying is to build. And if you will be able to build cannot be built nothing using only bricks and not all the other needed materials and all the necessary infrastructure.
To give solutions and to build first of all needed learning. Then much more, but this is the firs brick. Cannot be learned (especially some things) here in forum or only reading some article full of data. The world of knowledge is without end. Try to do a search and will be amazed but what you will find.
