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Politics : Ask Michael Burke
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To: valueminded who wrote (71825)12/13/1999 10:46:00 AM
From: Mike M2  Read Replies (1) of 132070
 
Chris, I don't recall who said it but Central Banks can print them selves into trouble but they cannot print their way out of it. ho ho ho The big untold story about this bubble is the unprecedented leverage of the real economy DEBT . If you allow debt to grow faster than income indefinitely you will default. If you voluntarily curtail your consumption binge then the economy loses the stimulus of debt fueled consumption. The modern economists make it more difficult than it has to be. Academia is very effective at programing their economic students into accepting what they are taught. I suspect the deflationists are a minority and many do expect stagflation but I believe there is a point when people become so over extended that they reduce their assumption of debt or default. It is a very simple proposition and i cannot understand how people can think it can end any other way. The big question is when do we reach that point. AG seems bent on finding that limit where ever it is. Money( credit) creation takes place largely through the origination of loans - you cannot force people to borrow if they do not want to - pushing on a string. I agree that the bubble continues until further notice. I expect severe tough love and economic violence. there is no alternative. mike
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