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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: dvdw© who wrote (37874)	8/3/2008 11:12:12 PM
From: energyplay	Respond to of 217802

Much of economics makes steady state assumptions, and tends to follow thermodynamic models. The appeal of physics as a model for all sciences tends to promote this, it is much simpler than biology. Simplified models tend to win out, because most people are uncomfortable with the reality that most real economies have some "Rube Goldberg" mechanisms in them. These economics don't work too well when resources run out suddenly, or more, cheaper resources become available. It also has problems when new markets open up. Oil finds in East Texas, the North Sea allowed the US and later the UK to push economic expansion, and then effectively build real infrastructure and business underneath the credit built false front. Conversely, the 1973 oil shock took down even solid economies. Greater productivity from technology or education also doesn't fit models too well, but it usually moves slow enough to fit with in expected errors. The next most recent bubble levered real productivity improvement from the internet and telecom into an asset bubble several times larger than what could be supported by the increased productivity. The housing bubble was almost all fluff. The China bubble has a large real production basis, but like the tech bubble, it may have overshot realistic evaluations.