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Strategies & Market Trends : The Stock Market Bubble
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To: Box-By-The-Riviera™ who wrote (1979)10/5/1998 9:13:00 AM
From: Sun Tzu  Read Replies (2) of 3339
 
There is no difference between now and any other compareable era. Thi s may seem illogical due to technological and structural advances. But the *scale* of these advances are compareable to that of the previous eras. Internet and computers are not changin our times any more than the industrial machineray changed theirs. When taken in scale, telcomunication has not changed our time any more than trans Atlantic oceanliners and telegraph changed theirs. I read a detailed passage once that described a banking crisis due to excessive speculation and the huge bad debt on the part of a few major banks, causing failure of other banks and a credit crunch. It was resolved within 3 years by the government garanteeing the people's deposites and extending credits to the creditworthy businesses and temporarily taking over some of the banks. sounds very much like the S&L crisis and the bridge bank (or even the current crisis), but it happend in the Roman Empire about 2000 years ago. A lot of studies also have shown that major innovations (as oppose to mere improvements to the existing ones) come in bursts in a wave like pattern. It typically takes about 10~18 years for the society to absorb those changes and change always causes stress to the system. So while it is true that the many things are different, on a more fundamental level, it is not so different.

Sun Tzu

P.S. If we were using a gold standard, we would have been in the soup lines by now. There were very good reasons why it was abolished and those who crave the return to the old days, should re-read the economic crisis that the gold standard had created.
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