Re:Bill Gross – Banking/finance “permanently damaged” [pdf]
by AnimalMuppet on Thursday March 03, 2016 @04:24PM
(#11220152)
My dad lived through the Great Depression. I remember that he talked about people carefully saving thread, not because thread was so expensive (or money so scarce), but because no new thread was being made, because the factories had shut down because the companies went broke. So I'm not sure I buy your interpretation.
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Re:Bill Gross – Banking/finance “permanently damaged” [pdf]
by jaggederest on Thursday March 03, 2016 @04:45PM
(#11220303)
This is a marxist-style crisis of capitalism, in essence:
a) business hires workers to make goods to satisfy demand
b) business overproduces to make sure they meet all the demand
c) business has 6-12 months of inventory, lays off workers
d) business can no longer sell inventory since workers don't have money, can't afford holding costs, dies
e) liquidator sells off glut of inventory, lowering prices and preventing new firms from entering the market
f) no new inventory is created since firms are dead
g) shortage arises, driving prices sky high
It's a bit like a wave oscillating in a container.