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Strategies & Market Trends : The coming US dollar crisis
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To: axial who wrote (19142)3/26/2009 3:31:20 PM
From: Tommaso9 Recommendations  Read Replies (3) of 71475
 
Here's my own take, which I could document if I wanted to spend the time doing it.

In 1987 there was a very serious, brief stock market crash. Alan Greenspan's Fed took action to make financial markets stable and keep credit available. This was so reassuring that a 12-year bull market ensued.

When this happy period was threatened with an end in 1998, with the Long Term Capital Management collapse, Greenspan et al. again stepped in and arranged an orderly wind-up. I thought the time had come for a stock market decline and was disappointed to see it headed off.

Then just two years later, Greenspan et al. concluded that the end of the millenium would cause a financial panic. So they eased credit to prevent this imaginary event that had not even begun to happen.

A good many of us on SI had by that time begun calling him "Easy Al" and criticized his reactiveness to imaginary threats.

The monetary ease of 1998-2001 encouraged a frivolous blow-off of the higher reaches of the stock market.

Then came the decline of the highly overpriced speculative stocks in 2002-2003 and again the Fed overreacted. This set off the final inflation of the longstanding housing market and encouraged the creation of all these toxic mortgages, etc and the pushing of every kind of credit card and consumer debt.

All of this accumulation of unsound arrangements began to come apart beginning about 2006-2007.

What is going on now is nothing but an even more grotesque and bloated creation of money and credit in hopes of preventing an inevitable collapse. It is a reiteration of the kinds of mistakes that have created the problems that need to be solved.
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