George, sometimes by mid 2002 to early 2003 we may see the bottom of the current bear market, the first cyclical bear market within the larger secular one. Hays is going to be disappointed, along with a host of other gooroos with whom he has aligned himself (the usual suspects more or less).
regarding deflation and democracy, note that hyper-inflation is even MORE dangerous than deflation in this respect. destroy the value of money itself, and you get Adolf Hitler. keep the value of money intact in a deflationary depression, and you get statist semi-communist interventionists like FDR. and even though i despise FDR, i think he's to be preferred over Adolf.
besides, while tech is clearly in a vicious deflationary spiral, the central bonkers are printing money like never before. as i've mentioned in the past, we seem to experience a strange mixture of inflation and deflation on the price front, with those areas that were subject to over and malinvestment in the past decade in deflation and the sectors that were neglected experiencing price inflation (most notably energy).
regarding the US current account deficit, it is growing by leaps and bounds. this year it will likely reach 520 billion dollars, or slightly over 5% of GDP. this is unsustainable - and no-one really knows what to do about it, so they do nothing and hope that it will continue not to matter. after all the tried and tested mania method of combating imbalances is to let them grow even larger. similar to all other outgrowths of the bubble, it doesn't matter until it does. the question is really not IF it will have consequences, the question is only one of timing. |
