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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Mark Adams who wrote (107705)6/8/2001 3:44:48 PM
From: pater tenebrarum  Read Replies (1) of 436258
 
well, the big problem we have on our hands NOW is that in recent years, instead of value creation, misallocation of capital has been the order of the day. so we are now faced with a period where the pie will be DEcreased for a while, as the malinvestments and associated debts are liquidated and weeded out. the cause for this unhappy state of affairs is the artificial Fed induced boom cum asset bubble that preceded the current situation. which is why i keep insisting that we would be better off with a truly free market money system, where interest rates are allowed to find their own level, instead of being subject to the arbitrary 'target' set by a bunch of bureaucrats.

as to the Fed study, i frankly doubt its conclusion that real savings have increased for the bottom 80% income brackets. it flies in the face of practically every other data point we have, from the decrease in home equity ownership to the massive increases in revolving consumer credit, all of which suggest that the average consumer has to BORROW to merely maintain his life style. besides, almost every month, the income and spending data show that more money is spent than is earned. the bursting of the tech bubble has also had the effect of decreasing household net worth for the first time since that data series is collated.

frankly, it smacks to me of yet another attempt to prettify bad looking data by means of statistics.
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