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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Haim R. Branisteanu who wrote (3934)	12/27/2003 8:12:37 PM
From: yard_man	Read Replies (2) of 110194

good pt regarding statisical significance, but I think there is more to Kondrateif than that ... certainly there are discernible long term cycles in economies and political change ... you might have a legitimate pt to say they are not regular enough to be a useful short to intermediate term tool. I regard the K biz as useful simply for a framework for understanding how economic activity ebbs and flows -- some aspects repeat and parallels are clears -- other aspects do not repeat and there are no parallels with prior periods. It's like anything else -- it's one view that may be helpful to explain a thing or two ... The thread header, I think, is a good one because it pts to a reality that has been very longstanding, which is easy to extrapolate without much thought. We all tend to extrapolate recent experience forward on all the time scales that we are familiar with, i.e. it was cool today, it will be cool tomorrow (winter in the northern hemishpere) --- housing prices always appreciate, dollars are worth less today than they were 5 years ago -- our house was standing yesterday, it will be standing tomorrow -- the sun will also rise tomorrow, etc. K "theory" makes us step out and consider what happens when large changes occur. I think it is very useful to consider what can happen if the government cannot consistently produce the inflation that it seeks to produce. The whole industry we call housing is predicated on the ability of the government to continue to be able to produce inflation (monetary and housing prices). And the dependency is greater now than it ever has been, e.g. the recent rise in ARMs as a percentage of new loans.

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