>>The FED has flooded the system with liquidity much as the Emergency Room doctor fills the gunshot shock patient with IV solution and whatever else, replacing lost vital blood and life force with manufactured liquids, keeping the all markets functioning. And so, what I am seeing, not surprisingly, is an operating economy serviced by a functioning financial market saved, for however long, from internal imbalances, exogenous shocks, avoiding a deep recession or shallow depression, at almost and possibly all cost.<<
Can I not get you to consider the possibility that what you are seeing is a sound functioning economy, with stable consumer psychology, an appropriate level of liquidity as evidenced by insignificant cpi inflation and a continuing shift from basic manufactured goods (steel, textiles, rivets) to high value added products (software, aircraft, financial instruments) and to services? That the high profile problems at a number of companies are just the part of a normal ongoing market-clearing process of creative destruction? That what appear to be unduly high housing prices are merely the reflection of rapidly increasing demand in certain small geographic areas? That the astronomic P/Es of a small number of high profile technology stocks are a distraction from the broader market, which is more reasonably priced but anticipating a continuation of the prosperity boom of the last decade? That gold is a commodity that is unlikely to be subject to irrational exuberance? |
