Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	9/7/2003 3:02:46 AM
From: Seeker of Truth	Read Replies (3) of 74559

Looking at the nascent disaster approaching, hitting the US economy first and then damaging the economies of almost all other countries to varying extents, it may be instructive to consider what means there are for any U.S. government to avoid the catastrophe. Over and over on this thread it has been pointed out that Joe Six-Pack is over-indebted. On what does J6P spend the borrowed money? I think borrowing to buy a car is the most important loan. Why does he need a car? Because there is little or no public transportation available to take him to his job. If the federal government appropriated money to foster local bus transportation at a minimum level in every town of any size in the U.S. there would be a drastic reduction in the number of cars that were in essence rented to Joe 6P. There would also be a drastic reduction in the amount of imported oil. This would help the balance of payments in addition to reducing J6P's debt burden. And the buses would use far less oil equivalents than the millions of Joe 6P do in their separate cars. I think that this is not only a plausible solution, it is an absolutely necessary solution for the double crisis (balance of payments and individual indebtedness). To pose this move is to see how impossible it is, in the present environment. The combined power of the car companies, the oil companies and the banks that make consumer loans, is overwhelming. The necessary measures will not be taken. In Japan and Europe public transportation is widely available and correspondingly the consumers are not so swimming in debt. So it's a peculiarly American crisis, which however we individual investors can somewhat or largely avoid by buying real assets. This thread emphasizes gold and oil. I personally also like non-US real estate very much, providing it's not office buildings. That's an emotional attachment; I can't prove rationally that a shopping center will turn out to be as good as gold.

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