Bobby,
I think usually when markets crash, it is because intrusive governments have attempted to "manage" their economies. I'm sure that there are some who will wish to yak at me about "manipulation" of the market by the Fed, etc, but I'm not buying it. Interest rates have been dropping for 18 years, since we got rid of wage and price controls, "windfall profits" taxes and other such garbage. That is the economic reality. Has the drop been unjustified? Just look at the price of oil, I need say no more.
The models for economic crashes are the Asian Tigers, Indonesia, the Soviet Union, Iran, etc, and to an extent, Japan. Take a look at how their economies were "run" and tell me what you see. I don't think that the US qualifies. Left to their own devices, free people in relatively free and open economies will adjust realistically to economic conditions as they evolve. By any historical measure, the "middle class" in this country is absolutely huge, and I don't think this economy is going to suddenly roll over and play dead, regardless of what happens in China or Japan or elsewhere.
Tom |
