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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: yard_man who wrote (4051)4/9/2004 11:53:57 PM
From: mishedlo  Read Replies (2) of 116555
 
Modern day Kondratieff
Where are we in this cycle?

[Mish note: except for this note, the entire rest of this post is from Plunger]

1. War uses up productive capital and destroys asset values by huge uncertainty as to future property rights.

2. Immediately post war because of the low assets base savings are in huge demand for rebuilding and capex

3. Rapid stable economic growth tending to inflation as all productive capacity is used.

4. As stability returns and is extraplotaed p/es and asset values are elevated

5. As assets rise so a small sharp capitalist-system operator class gardually amasses a larger and larger proportion of the asset base.

6. Their wealth allows them to buy control over the system.

7. But their intent is to get wealthy and they don't spend their wealth.

8. The most lucrative businesses are all about shuffling assets not creating new wealth.

9. Excess of savings over productive use for them leads to a depressionary spiral.

10. As hope turns to despair turns to either anger or desperation ... return to (1).

Where are we now?

ALL depressions are caused by less spending than productive capacity, and the main cause is excessive concentratio of wealth.

Open to comments.

Plunger.
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