There is an interesting theorie...called the Kondratieff-cycle - named after a russian economist. This theorie is from the 1920s and describe a phenomenon the repeats itself in every second generation.

So one cycle takes about 50-70 years...about 2 generations, because after that time, the fear of debts has psychologically disappeared.

Debts receive such a high level, that they need to be reduced, until the next cycle begins. This cycle can not be avoided by politics and can be observed world-wide.

The cycle has 4 "seasons"

a)
Kondratieff-Spring – (since 1949): Economy is revitalized after the debts (from WWII) have been paid off. People are optimistic but are cautious towards making debts...unless for companies making investments.

b)
Kondratieff-Summer, (since 1966): More debts/mortgages and hence inflation rises. Resources decrease....resource-related wars start (e.g. oil). This phase ends after a recession (1980-82).

c)
Kondratieff-Autumn (since 1980): A "peaceful period" without many wars....resources availability increases as stocks, bonds, real-estate/property investments increase. Not much consumer inflation. Governments make lots of debts.

d)
Winter (since 2000):
Debts need to be reduced. A stock markert crash introduces a period of deflation.....an economic depression starts.


What do you think of this theory?

2001 the system almost crashed.....but by having really low interests (about 1% in the USA and 2% in Europe), the crash could be avoided/postponed.
This is why oil and gold increases so much in value.

In the 70s resources got so expensive, that interest rates reached almost 20%....today interest rates of 20% would be fatal....Just imagine your mortgage would be 20% like in the 80s instead of 5% .
.
Quite scary....

I think we should have gold coins as a currency again....or at least a gold-guarantee to be able to exchange money for a fixed amount of gold anytime. This way currencies would be more stable and trustworthy again. Nowadays, paper money is just based on trust towards the governments...but who trusts a government? Anyone could print his own money....and that's what countries do. If they start wars and end up having too many debts like the USA, they just start printing more money - and don't care about inflation or whether people believe the money is actually worth what it says.

I dont think it is a disadvantage that countries could run out of money if there is more money then gold..which was the reason why gold was replaced...... by ... er....nothing. If gold is the standard, there would be no inflation. I know many people tell that inflation is necessary for economic growth. I dont think so - I could imagine a world without inflation.

Or does anyone know why we need inflation? Apart from the governments being able to get rid of their debts more quickly? (Well, dont make any debts then...)