Sunday 11 August 2013

Why so many market crashes and bubbles since the 70's ?

We are always shocked by what we have read or heard about the Depression of 1920-21 and  the
Wall Street Crash of 1929 and the the market crash and depression of 1937-38.We have heard or/and read about unwise monetary restrictive policies and ultra protectionist trade responses by Goverments
which exacerbated these crisis, and that now, are past experiences with hard lessons learned.

But other market crashes and bubbles have happened long past these previous experiences, and they have become ever more often. I will mention them by calendar ocurrence, The 1971 Brazilian Market
Crash, the 1973-74  stock market crash, the silver Thursday 1980, 1982 the Souk Al-Manakh stock market crash,the Japanese asset price bubble 1986-1991, Black Monday 1987, Rio de Janeiro Stock Exchange Collapse 1989,Friday 13th mini-crash 1989,Black Wednesday 1992,The Dot-com bubble
(1995-2000), The Asian Fiancial Crisis 1997, The October 27,1997 mini-crash,the 1998 Russian
Financial Crisis, Economic Effects of September 11th attacks 2001, 2002 market crash,Chinese stock
Bubble,U.S real state bubble 2003-2008,US stock market crash 2007-2008 Great Recession,Flash crash 2010.


 I will write  on stock market crashes that have their origin in loose monetary policies,low and even negative real interest rates,in economies with low inflation in terms of CPI, which create
mis-allocation of resources and bubbles in asset clasess
   The mandate of Central Banks is only to have price stability and full employment?
    

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