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Strategies & Market Trends : The Stock Market Bubble

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To: The Ox who wrote (2788)7/6/1999 1:53:00 PM
From: Arik T.G.  Read Replies (1) of 3339
 
>>When dealing with a bubble, you have 3 options. Slowly let the air out, force a pop (pin prick), or keep increasing the bubble pressure until it pops on it's own.

#3 is the commonly used alternative by default. You sit tight, and the bubble eventually bursts (not pops, it never makes a pop sound, more like a strong thunder). 1929 is the classic case.

#1 was tried in Japan. Look where it got them.

#2 was never tried, as far as I can tell. It involves a special kind of political courage (in the sense used in the British TV series "Yes, Prime Minister) that is very seldom exercised in real life.

>>I don't see AG being complacent and I also don't expect AG to slam on the breaks. Much more likely to see him pump the breaks to slow things down.

That's contrary to his own words. He said he prefers to take a small preemptive action against inflation but to sit tight and wait for the bubble to burst on its own and then "address the consequences".

ATG
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