I have a pet theory: markets tend to crash every eight or nine years or so, because most people have forgotten long before then that markets can crash. That means that every decade there are always two or three years when dealers, experts, commentators and ordinary people believe, quite sincerely, that this time things are different; that they have reinvented the wheel, or that the financial system has become so clever and sophisticated that it can't possibly crash -- or even, and serious people have told me this from time to time, that the market can actually only ever rise.
None of it is true, of course. Take this crisis, for instance.
It all started with sub-prime lending. There is a lot of ignorance about what sub-prime actually means, but it is quite easy really: sub-prime is a euphemism for rubbish.
American banks lent lots and lots of money to people who couldn't pay it back because they were too poor to. That was bad enough, but the banks made it worse by then passing on the risks of not being paid back by bundling together thousands of good and bad mortgages and selling those bundles on to other banks around the world.
Those banks bought the bundles of mortgages because the credit rating agencies -- who are paid to tell banks how risky investments are -- told them that these bundles were safe and sound investments -- when in fact what actually happened was that the second the sub-prime mortgage market collapsed, everyone suddenly realised that they had bought a pig in a poke and had no idea whether they had bought good or bad investments.
The banks, therefore, were no longer able to tell which of them was going bust and which was healthy, and they stopped lending to each other, just in case they were lending to the next Northern Rock or Bear Stearns, thus making it far more likely that another bank would go bust and creating a vicious circle of rumour, fear and possible bank collapse.
It is clear that a few simple solutions will prevent this happening again. Not lending to people who can't afford to repay you would be sensible. Not bundling good and bad debts together and selling them on would also make sense. And making sure that the credit rating agencies can actually tell the difference between a good and dodgy investment would be a no-brainer.
Of course all of this is going to happen, or has already started. The reason there is a credit crunch at the moment is that the banks will now lend only to people who they are absolutely certain can pay the money back. And the banks are refusing to lend to each other except at exorbitant rates because they are terrified of taking risks. And the credit rating agencies are hopefully getting their acts together as well.
The problem is that none of this is solving the current crisis. In fact in the short term, it makes it worse, as the world's financial markets grind to a halt -- which is why the world's central banks are throwing money at the industry to keep it ticking over.
In theory, however, it will make another crash in future years less likely, as the banks take fewer risks, we borrow more responsibly, and everyone remembers the last time we were all stupid enough to believe that the financial whiz-kids had discovered how to turn base metal into gold.
Except that next time, according to my pet theory, we and the banks and their regulators will once again have forgotten about this crash and will have started believing once again that cheap money is available on tap for everyone who wants it, regardless of whether they can repay it and without any increase in the risk of a financial collapse.
By my calculations, that will be some time around 2017.