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Will The Boom And Bust Cycle Ever Be Beaten?

We heard Gordon Brown famously suggest that he had cracked the boom and bust scenario in the UK economy, we heard the US authorities confirm they were more in control of the economy than ever before, and then our troubles began!

The truth is that the boom and bust scenario has been part of economic cycle around the world for hundreds of years. In the good times nobody can see any dark clouds and all seems rosy in the garden. Spending increases, competition increases and slowly but surely profit margins fall and then demand starts to wane. These are the signs of a downturn, a peak in the market or whatever you wish to call it.

Alternatively when markets turn it can take a while for it to sink in with many people, then slowly but surely they wake up to the realisation that the economy is in trouble, that jobs are at risk and then they start to panic thinking things are actually worse than they are. From over exuburance we then move into the depths of despair and a collapse in consumer confidence.

Then the markets hit the bottom, confidence starts to return and slowly the recovery starts to pick up and then, we are back to the boom and bust scenario. It is all so predictable but very hard, if not impossible, to control - that is human nature for you!

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