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Strategies & Market Trends : Classic TA Workplace

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To: Jack of All Trades who wrote (56874)	10/17/2002 11:44:08 AM
From: reaper	Read Replies (1) of 209892

<<The only way to bail out the credit mess is to make money cheaper>> not really true. the only way to bail out the credit mess is to produce something of economic value to cover the debt. printing money til the cows come home, lowering rates to zero, etc does nothing to help this along. you see, all this credit was taken on to fund investment (corporations) and consuption (consumers). it has turned out that on the whole there has been very little economic return for all that corporate investment, thus corporations on the whole do not have the where-withal to make their debt payments. look, the same thing happened in Japan in the 1990s and in the US in the early part of this century; a ton of money was invested in non-productive assets. as far as i am concerned Greenspan is only making the problem worse right now as low interest rates and insistence by Bush & O'Neil that everything will be fine just around the corner is causing a flood of buying of other non-productive assets in terms of housing and consumption goods. <<You think Greenie will let deflation happen? >> i don't think he has a farking choice. Cheers

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