Robert, i have the exact data on the credit explosion somewhere...but i'll have to dig them up, so i'm going to post them after trading today. what i can tell you right off the bat is that the figures are extreme and rather frightening. w/regards to the current account, it's not a problem as long foreigners continue to be prepared to finance it. that is why a recovery of the Japanese economy ultimately poses a threat to U.S. financial assets, as international capital flows reverse direction.
as to the asset bubble, some see it, some don't...it depends on whether you believe that traditional measures like p/e's, the stock/bond yield ratio, etc. count for something or not. if they do, we're in an asset bubble, no doubt about it.
is the Fed prepared to do something about it? my guess is no, since it will want to avoid being blamed for popping it, but that view is of course debatable.
i agree that an open society makes it more difficult for a government to engage in various shenanigans, but it doesn't make it impossible. rather governments are getting more ingenious in how they go about their behind-closed-doors business.
is saving via the stock market really a substitute for more traditional avenues of saving? i personally doubt it, since 'saving' in the stock market involves a lot of risk, Glassman notwithstanding.
regards,
hb |
