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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: TobagoJack who wrote (25624)11/21/2002 11:53:18 PM
From: elmatador   of 74559
 
The whole post war economic system was devised with of locks akin to the Panama Canal. A lock in between several groups of countries and the control of the locks in the hands of governments and multilateral institutions. The locks' system is breaking down. Globalization and all that. Of course water is being, hurriedly, pumped up to the boats floating in the locks up stream to avoid them floating down to the level of the boats floating at a lower level. That is what's called inflation.

Deflation means all those boats, floating up those locks, will be flushed down to the level of the boats down below at a single go. The deflation -locks opening up and flushing down those boats floating at the higher level- would not affect countries that have never been inflated. Case in point: Eastern European countries. If you are there already and your boat is floating at that level you will be OK. You won't perceive the mayhem, only those boats arriving at your side. Now countries that have made a living out of being inflated are in for serious trouble: Germany, UK, Sweden, France, well, most, EU countries minus Greece.

By the way, the whole plot about EU enlargement is to get those former communist countries to inflate. It is like pumping water into those locks to bring them up so that the upper locks don't fall too far down.
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