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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: CalculatedRisk who wrote (9480)	7/18/2004 2:10:04 PM
From: Haim R. Branisteanu	Read Replies (1) of 116555

there are some parallels to 1987 and 1989/90. In 1987 cash was trash and so was it in 2000. After 1987 the real economy was saved by drastic increase in liquidity and lower interest rates as a result the RE market heated up. At that time that was AG answer to speculative financial bubble. RE bubble started to burst in 1990/91 or 4 years after the stock market crash AG repeated the same this time strategy and if history is a lesson RE should be at peak now all ingredients are there. The difference now and then is the much higher debt to GDP the and lower interest rates - add to the mix a shrinking manufacturing base and we are far worst than in 1990. The other aspect is the price of energy and it's ramification. It is sad that under the Clinton administration most efforts to find alternative energy sources were stifeled due to anticipation of new oil finds in the Caspian basin and reliance on Russian and Caspian oil BWDIK

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