Wednesday, September 09, 2009

Patterns of Chaos

One of the last Bubbles began in November 1971.
Bob Moore launched Intel´s first Microprocessor, the precursor of the computer on a chip.
Chips were powerful and CHEAP and made possible technological and business future.
Life changed not only in the technological field, in all its aspects, the financial was one of them, may be the most affected.
At that time most middle-class kept their money in the Bank, investors were a few.
At the end of 1990 even people with modest salaries turned in hopeful "investors".

This was nothing else than the repetition of what happened in 1908 when Henry Ford brought on the market the first "mass car".
He began the era of the mass production and mass consumption.
In 1920 the New York stock Market was seen as the engine of the world’s economy.
As it happened later in 1990 the investment in stocks or real estate seemed to grow and grow in an unending market.
It promised great wealth for the players.
The crash was as unexpected as the following recession and depression were hard and prolonged.
Digging into history a similar sequence had happened before.
A decade after the Industrial Revolution there was the amazing investment boom in the stock of companies constructing railways.
The "Railway Mania" ended in panic and collapse in 1847.
Every technological revolution led to an explosive period in the financial markets.
The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end.
This is the period in which capitalism shows its ugliest face.
The time when rich get richer and poor get poorer.
When the financial breakdown comes, the party is over and the time comes for analyzing what went wrong and what can be done to prevent it from happening again.

There begins the search for patterns of chaos.

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