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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (67664)	9/14/1999 1:38:00 PM
From: yard_man	Read Replies (3) of 132070

Is this tortured or what? >>The main reason we are not excessively bearish regarding stocks, despite the current over-valuation, is the nature of modern money. The US stock market has never been as highly priced as it is today, but the US Dollar has never been as worthless as it is today. There are many similarities between the stock market mania of the late 1920s and that of the late 1990s, but the critical difference is the unit of measurement itself. At the time of the 1929 crash and subsequent depression, stocks were priced in terms of a rock solid currency. They are now priced in terms of something that can be created in unlimited amounts at the whim of bureaucrats and politicians. When the US debt bubble begins to unravel, the Federal Reserve will provide whatever amount of money is necessary to prevent a sharp decline in asset prices and a severe recession. They can do this by monetising bank assets. <<

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