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The bubble is set to burst again – but speculators never learn
As house prices – fuelled by idiotic government policy – approach pre-crash levels, another recession is set to follow, writes JOHN ELLISON

ECONOMIST Heather Stewart last week referred to the 2007 sub-prime mortgage crash and its aftermath as “the latest in a series of periodic convulsions in modern capitalism.” She had no doubt that “a fresh crisis looms.”

She linked this prospect to warnings in recent days from the International Monetary Fund (IMF) and the United Nations’s trade and development arm UNCTAD. A specific fear is that speculative money which “swills unchecked around the world,” may be abruptly withdrawn from these countries. The fear stems from the protracted recent fall in global commodity prices and the connected slowdown in weaker economies.

The possibility of increased global interest rates, for six years rejected as an option, only enhances this fear. Fellow economist Larry Elliott wrote in Monday’s Guardian that the IMF message to Europe and Japan is “to print some more money,” as raising interest rates could have “nasty spillover effects around the rest of the world.”

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