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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Hawkmoon who wrote (5166)11/30/2001 4:05:42 PM
From: Yorikke  Read Replies (3) of 33421
 
"And I'll tell you what... I would rather the Fed do everything possible to "keep
the game going", than to see the world descend into a global depression and
the eventual barbarity that generally comes as a result."

But what it the Fed is taking us there by way of its own myopic view of what is best for the country? And is that really the choice: Play the game or utter calamity? Doesn't give the concept of responsible restraint any standing does it? But you're a player; and the game is the thing.

There is a business cycle and it will function. Given the overinvestment, poor investment, and just plain stupid investment in the last upswing there WILL be a downswing, and it is likely to be for some time. Not to accept that, to fight it, is just the thing that will make it worse.

The growth in the money supply and fall in credit cost has just fueled the markets and let people and businesses dig themselves into deeper debt. It all moves on the assumption that it will never end. But when a person loses his job the cash flow stops and all the best loan rates are worthless if he can not make the payments. The same is being demonstrated in the business community.

If you can run a marathon, can you run an ultra out and back; or how about a Tahoe 3 day 3X marathon? You can scoff at the comparison but somewhere, sometime the runner just can not go any farther. All the carbo load, Ultra, water and energy bars just don't do anything. Its over. Every sane person can agree with that. That does not mean the runner is a dead man, it just means he needs some rest, and maybe needs to reassess his abilities.

The same can be said for this economy. The alternative is NOT disaster. But the alternative is something different from the 'game'. My feeling is that the sooner we begin to accept the alternative of responsible economic restraint the better off we will all be.
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