80 years of life, 30 years of work, causes crash

         Richard Pedde farms at Indian Head, Sask., but he had a previous career as a trader in Toronto and New York. He has a keen eye for what drives the market, and what causes it to crash. Pedde and Rolf Mirus, professor emeritus and the University of Alberta, co-wrote an article recently about their take on why we're in a financial crisis. Too many people taking too many risks so they can retire young is a major factor, they say.

Here is an excerpt from their Edmonton Journal article:

It is probably not a coincidence that the increased consumer spending and lower savings rate and the desire for early retirement over the last generation or two were accompanied by an increasing number of financial crises. The economic literature shows 38 such crises between 1945 and1971. By contrast there were 139 crises between 1973 and1997 (Eichengreen and Bordo).

Until government and society at large are willing to address the fundamental issue -- namely, the pursuit of early retirement and high consumer spending lead to riskier investment decisions by a significant segment of the population -- all the talk about more regulation of financial practices and institutions cannot change one fundamental fact that we must be ready for repeated financial crises

Pedde has offered to write a similar version of the article for Grainews, with more of an agricultural twist. It will appear in late March or April. Meanwhile, to read the entire Edmonton Journal article, click here.