Economic cycles are getting smaller

As we all know, economic cycles have existed for decades and those who have studied macro economics understand the basics of cause and effect that they had in the past.

Since the early days of liberalism we started to understand that the effects that local economic policies where starting to become more inefficient as the world's economy was getting each time more integrated.

Of course that one of the most beautiful characteristics of today's economies is that they are a result of these decades of learning.

This is why today a overheated economy is almost as big problem as a slow economy. And the explanation is very simple: too much growth creates too much inflation and that means a huge problem in the medium run.

Because everyone wants to achieve sustainable growth, everyone looks to anticipate economic cycles.

This is an extremely important point in the decision making process.

When reading yesterdays interview of Pedro Solbes (Spanish Finance Minister) I noticed something interesting in his speech "How Spain will return to strong growth" and compared it to Jean-Claude Trichet (ECB) statements.

It's the simple fact that because oil prices are returning to reasonable levels that everyone anticipates the upturn of todays stagnant European Economy.

Well, here are some suggestions about anticipation:

.We all know that speculation is driving capital markets, avid for easy money. We saw that in the recent decades in the .com bubble and now in the commodities bubble. Where are they headed next? How can we anticipate the effects?

.Why shouldn't the Central Banks of Europe and the Federal Reserve start working on a mathematical model that studies the effects of change to make these economic cycles even smaller? Imagine the potential benefit for Mankind of a World that has no cycles due to the anticipation and adequate correction...

This is about taking our future into our hands. I don't believe in epic economic crisis in a near future (except due to any large multi-regional conflict) but I would love to live in a world were economic stability could be achieved by all countries: I believe we are getting there!