There is usually some sort of cause that triggers the effect. (War, terrorist attack, natural disasters, etc...)
You are right tho. Public opinion can certainly send it plunging out of control.

Economic recession is like gas collecting under a pump. It can drip for ages and nothing happens, then some day some random event sparks it off. It's usually a timing thing, the worst crap in the world can happen and nobody blinks an eye until people feel ready for a recession. Usually it's a combination of out-of-control economic growth, a feeling of anxiety by the public and some kind of sharp bad financial news all happening at once just far enough from the last recession to make people worry. Problem is, the exact same situation can happen a year or 2 earlier and not set things off... so it's way more than cause and effect. They're not things you can predict in advance, only prepare for.

Um, no.



Yeah, they don't show up until people feel good and ready for them.



This is called inflation and it's carefully monitored. We didn't have that this time (nor in the last few, except the 80's). So, no.



Didn't someone say something really close to this a few posts back?

The rest of it is just drivel.

First, economic growth is not the same thing as inflation. Inflation is the growth of the monetary supply, economic growth is the growth of monetary demand.

Second, are you kidding me? We had massive inflation prior to this recession, it just wasn't reflected in the CPI because our trading partners devalued their currency as fast we could ours (that and the CPI is doctored a bit). But all you need to do is take a look at home prices to see it. The dollar went from 1.2 eu to 1.6 eu, there was a massive loss in buying power prior to this blow-up. That's what leveraging does, it makes the dollar cheaper.



If you take it completely out of context like you just did, yes. But it's one of a dozen elements that have to be aligned. Just having people "feel anxious" isn't enough. There's a whole set of circumstances that have to meet, timing is one of them. If the timing isn't right, fear and random bad events won't be enough. And it's impossible to predict, going forward, when the next recession will be in advance. We can make loose guesses, but the best you can do is know soon after it's started. Fortunately that part isn't difficult.

Just tossing in another viewpoint... cash is no longer based on metals and has not been for a long time. Next change was when currency became based on paper...current values are based on electronics except for those tied to petroleum. During the current economic crisis we had over 300 trillion debt and values based on about 80 trillion real currency worldwide. Looking over other issues such as changes in cost of gas/petroleum products the major part of that was hedge funds selling back and forth as the stock market was collapsing and forcing prices to fluctuate way up and down.
My feeling is that the real issue everyone overlooks is the deregulation of not only banking and insurance but also other markets such as allowing energy distributors to become energy providers (look at Enron as the example when they would ramp up and shut down generators - send electricity out of state and bring it back at higher prices as in when they created rolling backouts in CA and destroyed that states backup cash reserves). Then add the issues of making bogus accounting as Andersen did before they went belly up and destroyed the retirement reserves of millions of people.
While there is a false system in place of treating corporations as 'people' this will only continue. In order to have a solid economy we need to have jobs in the US making products like we used to and paying a high enough wage that people will be able to buy what they make instead of working 2 jobs (or even more at minumin with 2 folks working) in order to survive just to pay for food, housing and if VERY lucky maybe enough insurance to take care of their kids for just basic health issues. It is time to tax corporations at real values in the places where they do business just as a basic start.

OK...made mistake about 300 trillion debt...should have been something to effect about 300 trillion assets based on about 80 trillion real value currency so that means everyone was speculating on values that did not exist. had a coworker who used to brag for hours about how wealthy he was getting buying various housing properties for rental and resale starting with his own mortgaged home..then leveraged that for next one...leveraged that for the next ones and he was really bragging when he had about 13-14.... then the bottom fell out of the artificial market created by deregulation and sales of blended junk crap created by banking deregulation and sales of the toxic bundled bonds sold worldwide affecting Europe and other places when our economy collapsed. Actually there were quite a few of us who were laughing when Steve's imaginary bubble collapsed and he lost it all so that lesson is TOTALLY AVOID LEVERAGING IN MOST CASES!

Anyone want to sign up for my Tin Foil Hat investment fund? No real ROI, but it makes everyone feel better. Just send me money, and I'll send you a shiny hat.