What if this is not a financial crisis?

Measures to fix the global economy haven't worked. But what if we're going about it all wrong? asks Simon Caufield. And if it isn't a financial crisis, what is it?

Three and a half years after the failure of Lehman's, Western governments are still running huge deficits. Interest rates remain at rock-bottom levels and central banks are printing more and more money. Yet unemployment is rising and wages fail to keep pace with inflation. What's going on? Professor Bruce Greenwald, of Columbia University, believes the treatment isn't working because the illness has been misdiagnosed - this is not a financial crisis.

If that's hard to believe, think back to 2003-2007. People spent so much of their incomes that savings rates went to zero. America had a construction boom. Britain had banking and public-sector booms. None were repeatable or sustainable. Yet we did not reach full employment and real average wages stagnated. Some boom.

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Simon Caufield started out as an engineer and has an MA in engineering from Cambridge. This was followed by an MBA from the London Business School.

 

After graduating, Simon worked his way up to become a Management Consultant for banks and insurance companies. This gave him the chance to see the city from the inside.

 

In 2001, Simon started his own company to develop software designed to price banking services, such as loans and deposits. After growing the company to 100 employees, he went on to sell this in 2007, looking for his next challenge. 

 

Also during 2007, Simon ‘sacked’ his fund managers and took complete control over his investments.  Now he devotes all his time to investing and is an angel investor to help start-up companies. He has built up a reputable 20 years in the industry.

 

Simon writes his own investment newsletter – True Value. This follows the strategy he established in 2007 and is based on assets that are priced way below their true value.  He scours the worldwide markets for equities, bonds and alternative investments to find opportunities that fit his conservative and contrarian approach.