The Upwave
John is currently working on a new book, The Upwave:
Writing this book on the coming golden age of early 21st century capitalism would appear, at the very least, somewhat eccentric. Here we are, in January 2009, in the middle of a world economic dowturn, one that the large majority of pundits and economists are describing as the worse ‘crisis’ or ‘meltdown’ since the Great Depression of the 1930s. Of course, it is no such thing, but the outlook appears bleak according to news reports and broadcasts. During 2008 the stock markets around the world lost roughly a third of their value; while in the United States the housing market has dropped by 18%. These events, the current orthodox view holds, were caused by the ‘Global Financial Crisis’ or the ‘Credit Crunch’, but are in any event to be blamed on greed and the over-valuation of stocks and shares. Yet, if the market recovers in 2009, as I believe it will, then the stocks that are now under-valued will approach something akin to their true worth. On this basis I would expect the Dow to get close to 10,000 points during 2009. There should be no 10-year depression.
The reason people compare our present woes with 1929-1939 is that at that time there was a stock market collapse, a banking collapse and a severe recession. But it is important to understand that in 1929 the rate of profitability had been declining for some 10 years, so that the crash was an almighty correction in the first instance. This in turn triggered debt default, foreclosure, bankruptcy and a banking collapse. By contrast, until late 2007 the economy was growing and expanding nicely and the underlying conditions of demand and supply were strong. Inflation was low, and profitability was increasing; new technologies, new goods and services, were finding markets.......
