Economic crisis puts us in front of some discrepancies between the estimation of the value of property at a time and estimation of their value at a later time. Before you see what feeds the discrepancy, we are first a trap: for millennia, the great thinkers have tried to determine a measure of value, by analogy with the length or mass. This search has been and always will be in vain, also search by stone filosofale alchimisti. The value is not something objective, but subjective assessments depends on what people are doing with them on various goods, be they changed the market or not. The value of goods cannot be separated from the human needs, how they are perceived, knowing that each relating to one's own needs and alternative methods by which I can be satisfied. It can not be separated either by the values to which we must give up in order to meet their respective needs (either ordinary goods, either).
Our individual feelings on the face and harmonizes with those of our fellows, mainly through trade carried out on the market. Of course, we are forced to correct their own feedback to us regarding the value of goods and services when "at the expense of home does not match with that of the fair".
But the most serious divergences in the feedback appear and persist when the price mechanism is disrupted by the monetary creation. It is important to remind that, for centuries, the money is controlled by a monopoly under the tutelage of political authorities. The situation has become much worse in recent decades. Since it was dropped from the local convertibility into gold, there is virtually no limit in the way of monetary creation by the authorities. The result is manifested in the form of inflation rates higher than the incomparable in the past. Continue growth in prices and a generalized generates and maintains the illusion of an easy, disrupts the blossoming in relative prices and encourage investment in projects whose profitability is only apparent and can maintain only acceleration of inflation. If this process continues, it appears that hiperinflatia ruined middle-class from Germany and brought Hitler to power. A more recent example can be found in Zimbabwe, whose Central Bank has just redenominat the currency at an exchange rate of 1 trillion old dollars for new $ 1 … The alternative may not be only roughly before stopping him to destroy the entire economy. This means the breakup of return to reality and illusions. Central Bank errors can be magnified by commercial banks, especially when they matter in case authorities indulgence eventualitatii bankruptcy. The situation is exacerbated by the authorities, through the legal framework designed to deresponsabiliza and to encourage excessive risk-taking. That's exactly what happened in the United States and in many other countries.
On a free market[…] prices of the goods discrepancy between the market and prices reflected their financial markets is not so much on how to think. Mortgage-backed bonds they had value as long as the owners of their property rates and/or plateau as soon as the "real" value of housing was built. In other words, inflation to maintain the illusion of prosperity on both markets. But the breakup of illusion has occurred on both markets. Bonds ' sub-prime ' have plunged more than others because they were secured by the assets of the poor. Moreover, financial market prices are more flexible, and investors are more sophisticated, which in certain circumstances can result in larger declines than the real market just because the market declines are anticipated.
Readjustment of prices
The process of price adjustment to new information is reasonable and welcome. It takes place at all times, even when the market does "normal". He is at the origin of all efficiency gains in the economy, that is the origin of all goods that we use in everyday life. Thanks, for many people, this life is longer and more enjoyable than after 100, 1000 or 2000 years. Problems arise when the necessary adjustments are very extensive. The adjustment may not be as profitability projects with lina artificial and illusory are restored to their "real" value, which sometimes may approach zero. The creation of the monetary excesses were higher, the corrections are more extensive. Of course, in the process of correcting the errors often appear opposite, meaning prices may drop too much, but we cannot tell in advance of these errors. The only way to get to know the price correctly is through successive attempts, through the correction of errors, i.e. through the functioning of the market. There may be a painless adjustment because you have wasted resources that would have been used for other projects, really necessary. Adjustment is predictable in the sense that it is inevitable, even if its exact time is unpredictable. If you would anticipate that d-day will dissipate and the illusion will follow, people will act properly in d-day-1. It would be good to remind ourselves of the fact that today's price depends on the price, not the price of yesterday. The adjustment may not be uniform, and as each tries to make shelter ahead of the other, which produce "smelly" among buyers and sellers reduce the number, so there is a drastic drop of prices.
Price mechanism is a system that is based on the knowledge available in society, that is everything that everybody knows in the part about its needs and possibilities of meeting them. He is also the mechanism of transmission of knowledge, through the integration of the new information. For example, a credible information regarding a new possibility for the production of energy at a cost much lower than at present will have the effect of reducing the price of oil and other conventional forms of energy. This will influence people's behaviors and the prices of other goods in ways that cannot be provided in detail. However, each will try to anticipate their evolution as correct.
The reaction of the political actors
At every crisis, political acts after an RTD print easily recognizable. First, they will not recognize or will minimize errors. Then, they will find other guilty. Depending on the historical background and ideological orientation, suspects are: previous Governments, enemies both internal and/or external minorities and foreigners in general, international organizations, multinationals, globalization and, ultimately, the market economy and capitalism in general. Thirdly, will take measures as soon as spectacular-must give the impression that mastered the situation-without, take into account the negative consequences in the long term or short term negative consequences if they are harder to see. Politicians react this way because there are people and because they are involved in politics: we all find it hard to admit errors, but us political system encourages perpetration and spoils their sanction. Indeed, in the field of political decisions are the main characteristic of having positive effects in the short term, and/or of a well defined group of individuals, even if there are negative effects much more serious, as long as they are not clearly identified or will manifest itself in the medium term or long term. Here is the major difference between the market and politics: ordinary people are interested and the long-term consequences of their decisions, while politicians are less concerned with the consequences of that will manifest itself after the elections. The phrase "after us, the deluge" was not used by a successful entrepreneur …
Faulty macroeconomic theories
Academia, at least in the field of economic sciences, does not "monolithic unit" that you suggest using singularului. There were always current who considered government intervention as a means of improving the functioning of markets. The social sciences have a terrible disadvantage towards natural sciences because the errors are much harder to remove. Not even the great Communist experiment was not sufficient to make all marxistii to change their opinions. With each crisis, they are becoming more vocal. Generally, State intervention in the economy, voters found new arguments during the crisis since then, by coordinating decentralized market, no longer works as well as we are accustomed in normal periods. It's enough to think only the Communist experiment, to see that there is a disaster big enough to persuade and last in the field of social sciences intellectual that he is wrong.
Similarly, keynesiste theories return to fashion in times of crisis. Politicians-just waiting to hear the message of these theories, which can be summarized in the idea so pleasurable to the masses according to which to enrich yourself is enough to spend more. All keynesistii are asking for public expenditure growth and now has budgetary deficits. There have been a lot more silent in periods of economic growth, when budgetary surpluses recommend keynesista theory.
The evolution of the phenomenon in Romania
Perhaps the main weakness of the Romanian economy is the fact that the economic environment is still one hostile to private initiative. Any roman entrepreneur may feel disappointed and annoyed by the place occupied by our country in the rankings prepared by the World Bank with regard to the business environment, "Doing Business Report". But he knows that the place is "worth it". For ordinary people, the most tangible risks are loss of employment and/or the bank rate increase due to increase of interest rate and the depreciation of the national currency the currency in which the girl was taken credit. The block is difficult in appreciation of the measures taken. So far, the general impression is of hesitation and a slur: good ideas are abandoned or cancelled by demagogic initiatives. A far greater danger than the crisis is precisely the measures taken in the rush by politicians to "solve" and uncertainty in which they generate. The latest example is the flat-rate tax, but my fear is that the list remains open. This concern is shared by the entrepreneurs and employees, which means that it generates uncertainty authorities instead of mitigating it.
