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

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To: GraceZ who wrote (12828)	10/4/2004 10:42:18 PM
From: Elroy Jetson	Read Replies (1) of 116555

While interest rates have become progressively lower since 1982, home owners suddenly decided to extract their equity in massive amounts only four years ago. home.pacbell.net home.pacbell.net You are once again suggesting that this is because interest rates finally declined to that "magic level" where home equity simply had to be borrowed and spent. Even you realize how ridiculous your comment is. If you don't, you should be committed to an appropriate mental facility. While the Economagic Lie Server faithfully reports the government lies and "adjustments", the real economy is under great duress. As jobs are exported to other nations, many home owners have been eating their homes over the past four year out of necessity to continue putting food on the table. Many others have seen their real incomes fall and foolishly take advantage of the Fed's relaxed lending standards to "maintain their preferred lifestyle." The especially foolish have used the relaxed lending standards to expand their lifestyle to that which they cannot afford or take on highly speculative risks with borrowed money. Go back again and read the quotes by Schumpeter and Rist and you'll find a description of America today, as fresh a this morning's headlines - even though the quotes are from 50 years ago. Reagan's tax policy of 1987 "Grandpa has a new credit card" put America on the path it's on today. The natural result, "Grandpa is broke" is lurking in our immediate future. home.pacbell.net home.pacbell.net Your fanatical belief in Reagan has blinded you to the reality we are experiencing. As a consequence you keep raising the same discredited arguments again and again in the vain hope they might finally be true. Dick Cheney said, "Ronald Reagan proved that debt doesn't matter." . . . But it ain't necessarily so.

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