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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Andrew G. who wrote (95963)4/18/2001 6:28:05 PM
From: pater tenebrarum  Read Replies (1) of 436258
 
my argument is merely that we're beginning to run into the law of large numbers...it's that simple really.

i repeat, if they successfully reflate again, the eventual debt induced crisis will only get that much worse. it can't be forestalled forever, as you erroneously assume.

you mention one of the crucial points yourself: the ability to service the debt. in order to service a debt that has been incurred, a cash flow/income producing asset must exist somewhere in the chain. we are however just coming off the biggest malinvestment and consumption binge in the history of mankind, so there's now a dearth of such assets.

even the better companies in the tech sector have seen their earnings collapse...quarter on quarter, the aggregate NAZ earnings have collapsed by 67%.

i agree with you that the Fed, and the financial system in general, encourage predatory lending practices and leveraged speculation ad nauseam. that doesn't mean their bag of tricks is a perpetual motion machine.
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