Well to put in simple terms economic cycles can have two simple comparisons. And its applies to not just economic cycle but to business cycle as well.
The first cycle can be called is the non-market way, or a life’s way. To make it more comparable consider the life cycle of plant, animal or top of the food pyramid humans too. We live a certain number of years and then we die, this is the ultimate statistics. To put it to brutal terms there is no cycle in it; it’s a one way path which ends with death. Ok you need a bigger example then consider communist Russia, or you can look up any monarchs. They all survive for some years or few hundred years max and then get settled in the dust.
Then there is a second type of cycle - the market cycle – which is the natural cycle. Very much like the nature or a complete cycle; the reason mentioning it this way is because it is repetitive in nature, the patterns will be repeated though the time frame may not necessarily be exact. There will be summer, autumn/ monsoon, winter and spring. A country and its economy will have to see it, doesn’t matter if they want to or not.
So the current financial meltdown should not be surprising, since we all are part of this market cycle. The new millennium witnessed financial engineering on an unprecedented level. Complicated financial models were developed to make people reach in short span of time. Then should it be surprising that we have been hit by the draught of credit and flood of pink slips?
This is similar to the excess done by us humans; too much of deforestation or building big dams without considering the biosphere then there will be calamity like massive flood, draught and according to most recent problems that we (humans) have created global warming.
Escaping it is impossible; unless you can figure out a way to escape death, don’t count on getting out of this mess so fast. We all read in school or if not in school then by way of experience we should learn – “You reap what you sow”
Unfortunately public memory is very short. when the time is good rather than taking some of the tough decisions we get greedy; then we tend to forget the lessons learnt a bit too fast.
The first cycle can be called is the non-market way, or a life’s way. To make it more comparable consider the life cycle of plant, animal or top of the food pyramid humans too. We live a certain number of years and then we die, this is the ultimate statistics. To put it to brutal terms there is no cycle in it; it’s a one way path which ends with death. Ok you need a bigger example then consider communist Russia, or you can look up any monarchs. They all survive for some years or few hundred years max and then get settled in the dust.
Then there is a second type of cycle - the market cycle – which is the natural cycle. Very much like the nature or a complete cycle; the reason mentioning it this way is because it is repetitive in nature, the patterns will be repeated though the time frame may not necessarily be exact. There will be summer, autumn/ monsoon, winter and spring. A country and its economy will have to see it, doesn’t matter if they want to or not.
So the current financial meltdown should not be surprising, since we all are part of this market cycle. The new millennium witnessed financial engineering on an unprecedented level. Complicated financial models were developed to make people reach in short span of time. Then should it be surprising that we have been hit by the draught of credit and flood of pink slips?
This is similar to the excess done by us humans; too much of deforestation or building big dams without considering the biosphere then there will be calamity like massive flood, draught and according to most recent problems that we (humans) have created global warming.
Escaping it is impossible; unless you can figure out a way to escape death, don’t count on getting out of this mess so fast. We all read in school or if not in school then by way of experience we should learn – “You reap what you sow”
Unfortunately public memory is very short. when the time is good rather than taking some of the tough decisions we get greedy; then we tend to forget the lessons learnt a bit too fast.
Well I would support that and go one step ahead and say that 'escapism' in this context is almost futile. I believe, this 'calamity' itself is a part of the cycle, that is almost bound to happen. The lack of science and technology a century earlier, just didn't allow to screw up on a 'large scale' ...
ReplyDeleteThen, words like 'meltdowns' and the likes are just a product of such 'development'.... For all you know, may be the dinosaurs started smoking so much pot, that they screwed up big time !! :)