There seems to have been a regular issue that affects the economies around the world.

Some companies build houses and offices, not to meet a demand that is current, but in a capacity far in excess of requirements. Hasn't it happened again and again, that e.g. in the Far East, huge building programmes were done and there was no demand. In Spain, all the holiday homes (second homes) built - now empty. China has built huge towns that are unoccupied, because the population cannot afford them.

Has building houses and offices become a form of speculation (risk), rather than a specialised part of the economy providing a much needed product or service?

If we used to have to make our own homes, or employ others to do so for us, when we had the money, isn't the problem now that there is so much money with the rich, that all they can do is speculate?

If a company doesn't need a new factory, or specifically asks for one to be built out of profit, then isn't that money going to go to waste, except to spend on unemployed builders, and materials suppliers?

Surely any excess building above capacity, above future projected capacity needs is speculation?

How many other parts of the economy are now just another form of speculation / gambling?

Is the world economy now just a toy for the rich, where lives, livelihoods and health and happiness are meaningless?

You are right. Shops holding stock is speculation in a minor form. If they hold enough stock to last a certain period of time, and have built up stock based on measured rates of trade, it is low risk speculation.

If a shop keeper buys in bulk to get a better price, then the cost efficiencies (savings) give a better projected profit, but if tastes change, and the stock cannot be sold, e.g. some consumer electronics products drop so fast in value that holding stock will damage your profit, or give you a loss, so yes it is speculation.

Notice I say "projected" profit.

If the Asian financial crisis was to a large part caused by the property speculation in the 90s, how many more times does it have to happen before we learn from it?

In the 80 and 90s, just in time (JIT) and lean manufacturing became prominent to cut inventories, to stop capital being needlessly held as stock, either as a risk of damage/loss, or so that the capital could be freed up to use else where more efficiently to increase revenues, to invest in (speculate) and increase profit.

When I say the rich, I mean anyone managing or controlling the huge swathes of cash that exist in the system. The money exists somewhere surely! If there are companies that hold cash, or banks looking to invest cash - like those Icelandic ones, who had the pensions of several local authorities.

If that money is in pension funds, and rich individuals, i.e. those of us who don't have to work every day of our life (to survive) until we die - the poor are those that do, is the problem really a mismanagement of the world economy on a large scale?

Governments supporting speculation that actually backfires at a later date?

Are we just saving capitalism from the capitalists or are we really beginning to recognise that capitalism (the system of money in which we operate, supported by governments and the population in every country) could be reconfigured (regulated) to ensure that the ones controlling the money (the rich) do less damage to everyone or everything else (the poor, the environment etc etc etc), including the capitalist system itself, which enables efficient wealth creation if used appropriately.

"State control under the guise of "we're only doing this for the good of the system". No ! "

So you disagree entirely with bank regulation!

After all this is state control.....for the good of the system.

I don't agree with all forms of regulation, but surely there has to be some, and to define where that regulation helps individual freedom and safety e.g. building industry, chemical industry, surely this is what governments are now finding out.

Of course the European laws go too far in many cases and need to be stripped back sometimes, but sometimes controlling many individuals, who are acting on their own, and if there was ONLY one individual acting on its own wouldn't be a problem, but when there are many of them, actually act as a herd, and cause new unexpected problems.

After all, aren't we all part of "The System".

But you are right.

If we let the banks crash, perhaps then they would learn that their inspired choice of 125% mortgages don't work.

Perhaps governments shouldn't regulate at all and let those banks that speculate go to the wall!!

People would question who to put their money with, they would have to be involved more closely in how careful their bank is being with their money, perhaps then we would get back to building societies, and not have banks speculating, and kill off the investment industry where many people would go for safety, rather than any risk at all.

Perhaps having two tiers of banking works best - the regulated part - the high street banks and building societies, where people want safety, and then the Wild West speculative banking, where there is no regulation, and no safety net of the population bailing them out!

One or the other - why not both!

Why choose?

Then the population really has a choice don't they!

That IS freedom.

As I stated earlier all companies and buying stock is speculation, so is R&D, but a more positive word "investment" is used, to say speculation is bad/negative, but investment is good!

Surely capitalism is the movement of money, and any movement helps, but if the government didn't step in, and there was a complete run on the system - everyone wants their money today, NOW!!!, then all those investments, speculations collapse......surely.

If that isn't prevented by regulation, doesn't the system FAIL?

All those companies that borrowed for stock, all those families that borrowed to buy a house,
(those families that speculated on their secure employment to pay the mortgage)

All those companies not generating cash that borrowed to invest (geared) in R&D

etc etc etc?

Can you see how much is at stake?

i.e. the whole of the western economic system, or every western economy that is running a deficit is...........speculating on the future ability of the country to repay that debt!

Perhaps this is why we need regulation for the 50% of the population that cannot afford to have their livelihoods, their security, speculated with!

What choice, what freedom would they have?

What choice, what freedom would anyone have?

It is very easy to decry regulation, but if you cannot see the limitations or risks if there is none, then some very bad decisions (lack of law or regulation, but regulation is law, but another "fluffy" word with positive connotations is used)

If banks lend money out, it would seem to be necessarily the case they won't have 100% of deposits in their vaults and can therefore suffer from a run on the bank.

If people are fearful of that, there's already an answer - stick your money in a safety deposit box and insure it. Then you're only at risk of it being robbed and the insurance company going bust. People should remember the only reason they get interest on savings is because of the risk they're taking from the money being lent out. If you don't want risk, fine, but you probably won't earn anything on your money either.

Do you have a solution ?