Credit crunch causes demand destruction
on October 2, 2008

radio.jpgWill Beacham of ICIS radio did a 6 minute interview with the blog this week at EPCA. It focuses on the impact of the credit crunch and the high oil price, and provides advice on how to prepare for the downturn.
If you would like to hear it, please click here.

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  • John Petty
    October 20, 2008

    Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948
    In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression.
    Our current situation is eerily similar.
    Eccles wrote:
    “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery.
    Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

  • Chemicals & The Economy
    January 25, 2011

    China tightens lending: Saudi may pump more oil

    Recent days have seen some signs that the tectonic plates under current chemical and polymer markets may be starting to shift. The most important has been the rapid rise in inter-bank lending rates in Shanghai. As the chart shows from…

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