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David Stafford
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Student of markets, enjoys following their course.
My book:
Around the World in Several Pieces
  • Bubbles Within Bubbles; Developing A Macro Lense. 0 comments
    Jul 23, 2013 2:42 PM

    When I saw the headline of this recent piece;

    ("One third of Europe's unemployed are Spanish");http://www.zerohedge.com/news/2013-07-23/one-third-european-unemployed-are-spanish

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    I was reminded of reading of the state of Spain in its civil war era in the "journals" (surely all recreational reading involved a tint of some recreational writing) by George Orwell(Hemmingway was supposedly also involved in said war). I remember Orwell writing on how many of the troops in the extremely poorly funded army he fought in Anarchist/communist side, were briskly sent off to the front lines per se, to shoot at stragglers with just a few bullets and a packet of matches to their name. Of course, this is probably not anything like what it means to be unemployed in Spain contemporaneously, but this reminded me of how Spain has in recent history(since pre-WW1) had some kind of economic issues per se.

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    In further researching this subject, I discovered more about the odd sort of relationship between the Spanish military and the King of Spain, and more importantly how that economic issues had really been a huge sticking point, that most likely lead up to the aformentioned civil war to begin with(as is often the case). If one wants to read up more on this period one might want to read up on the reign of "Miguel Primo de Rivera"(seems to invoke some concepts similar (inverted results/approaches) per se as the rise of Napoleon).

    for a more succinct history of the Spanish economy one can check out;

    http://en.wikipedia.org/wiki/Economic_history_of_Spain

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    Either way, we could keep going even further back to the middle ages, when so much Spanish wealth was brought in from the Americas in the form of silver and red die(cochineal), which believe it or not was a huge export out of Mexico, then New Spain for quite some time. Either way, much of Spain is sort of arid, and despite modern greenhouse-ag techniques yielding fruit(pun) in the south, one may wonder, how long the perhaps bubble of current history has been expanding for.

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    Spain's history is sort of semi-disconnected from the rest of Europe's so perhaps it serves as kind of an interesting "control" if one will, in so far as it's cyclicality could be easier to detect, because of the lack of total exogenous factors effecting its economy over time etc etc.

    Perhaps what this is all leading to, is, if we were to perhaps say that post WW2 and perhaps prior to that even directly pre-WW1, we were living in a modern manufacturing/financial expansion birth/fade bubble, what would be next? might be a logical question one might ask. Sure, some excess capital wasn't destroyed or left shell-shocked and surely this excess continues to be rationed between companies/countries(post-financial crisis), but with the sort of lack of faith/adventurism per se, that dominates the current global economic gestalt per se, could we in a way be seeing the bursting of a "confidence" bubble per se?

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    Just earlier today, I was watching a program on bio-degradable plastics. Some entrepreneurial individual who had started a bio-plastic processing plant per se, was mentioning how people developed plastics in the 1950's and were so fascinated by it that they never thought about the fact that it wasn't exactly biodegradable. Of course this sort of served as a framing concept to further the development of the programs narrative, but perhaps apart from this role, might this be sort of telling of the sense of onward and upward per se of a period that seems to no-longer really apply to modern life?

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    Are we through with the great confidence/naivety bubble that lead to retrospectively speaking, "dirty"(environmental and financial contagion) decisions? Has the global financial system been kind of scarred by the leverage collapse of the late 2000's? It all seems like these events were similar to global economic/cultural growing pains in a sense. Perhaps when were children we thought insects and ants were just fascinating little creatures that seemingly skittered around carelessly too and fro, they kept us wrap in the gardens of our youth(overused cliche perhaps), until of course, we met the one's that carried a painful bite, that left some lasting impression on how we should further regard ants. Perhaps as the global economy/confidence levels as a society as a whole begin to take the events/revelations of the past decade or two into account, we may begin to see generally speaking a much less exuberant return per se, to the global confidence level that allowed for the massive leverage that lead up the last "financial crisis" per se.

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    With this in mind, is there a sort of baseline pre-bubble period that we could look at to sort of get a hint of what to expect when all the dust has settled from the latest revelation/tantrum scenario. Perhaps pre-WW1/pre-globalization/globalized efforts, might be a good place to look for the sort of tenure, of a specific region/tendency to expect going forward. How one would exactly use that for an investment based perspective could be a little macro based per se, but perhaps if one looks at trade balances/imbalances from the pre-functionally global age, perhaps one can see that sort of watermark that existed pre-exogenous stimuli per se, to see the relative "levels" per se where things will have to settle before they can get "better" per se, and perhaps these could in a sense give a sense of the real "rock bottom" or foundation per se, upon which much of the modern economic system is built upon, to see natural tendencies that are truly definitive of regions as opposed to simply being temporary aberrations per se brought on by changes in the global winds of trade and hegemony in the modern age.

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    Abridged;

    Perhaps just as its hard to detect how much a stock price changes due to changes in an index-investors portfolio, vs based on "in the know" information, it may be difficult to detect "true" relationships and levels of output per se that truly define a region per se, but perhaps if we go back far enough we can get to a time when the world economy was simpler, and perhaps gives us a better backdrop for the proceedings of the global economy as we look ahead.

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    Source;http://farm3.static.flickr.com/2684/4480116606_7e23f99dab.jpg

    An interesting and perhaps somewhat apropo image/symbol of the hindu notion/diety "Shiva", dancing, all the whilst with alternate steps creating and destroying;

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