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Strategies & Market Trends : The Stock Market Bubble

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To: pater tenebrarum who wrote (3218)6/6/2000 10:40:00 AM
From: Professor Dotcomm  Read Replies (3) of 3339
 
Between 1850 and 1914, there were many more years when the value of money went up rather than down. When huge technology advances are being made, disinflation rules. It was, people said, a very satisfying time. Consumer goods became less expensive, people came off the land to earn more money in the factories.

The two wars threw much of this in the ash can - although they too provided technology innovation which eventually was needed.

Anyway, the point that I am taking so long to establish is that if an asset bubble started developing, disinflation, as you say, can easily degenerate into deflation (like Japan)

Hence the interest of this chat site. Asset bubbles, like aneurisms, have to be scotched early in the game.
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