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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: sun-tzu who wrote (62304)1/27/2001 12:48:54 PM
From: Shack   of 436258
 
Well, your questions have been addressed repeatedly on this thread and far more eloquently than I could ever hope to. Suffice it to say, the premise is that the rate cuts will continue to stimulate the debt bubble. Once rate cuts do not spur new lending, then the fix is in. The only question remains, is the debt bubble still expanding and there are some signs that it is not.

In terms of the real economy, in 1998 the American consumer was still spending and the rate cuts further stimulated this action. This spending orgy has now reversed and there is no white knight this time around given the negative savings rate of the U.S. consumer. In terms of the stock market, despite record volumes, the market is going nowhere and don't be fooled by the Nasdaq rise. It is only a sector which will soon reverse. The real money has been churning for many months with prices going nowhere.

The best reading on the subject can be found in the weekly commentaries by Doug Noland found at the link below. I suggest you go through as many as you can. Like I said, the only question that remains is can AG re-inflate the debt bubble? If he can then the collapse is delayed, if he can't...then its curtains.

prudentbear.com
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