I tire of your allusions, again and again, of some lurking catastrophe hiding under someone's bed, or in some closet. You cannot prove a negative. Sure, there have been some high-profile flameouts. Big deal. This is capitalism. Failure is essential to efficient capital usage. Non-specific, hand-wringing pessimism sheds no light, and you are awfully short on real data to support any of your conclusions.
>The trend world wide is deflationary. American now have 93% cash flow of their disposable income commited to consumer debt. This is up from 65% in 1982 (Oct. 13, 1998 Barron's) This has nothing to do with traders. This has nothing to do with hedging anything. The engine of the world was the American consumer. The engine is very tired and the shopping basket needs oiling.
Deflation is caused by tight money. You fix deflation by loosening monetary policy. That process has begun. This is not an intractable problem. The "pushing on a string" may be applicable to Japan, where all the banks are insolvent, but has ABSOLUTELY NO APPLICATION to the U.S. If you lower the cost of capital, banks will lend more, businesses will borrow more, and the money supply will expand.
Consumer debt is but a sapling in the forest of money. Most aficionados agree that consumer debt has gone up because people use credit cards more than they did in 1982. Total debt is about 180% of GDP; that ratio has been flat for about the past ten years. Total debt is about 225% of liquid assets, which is actually a decrease from a peak of 244% in early 1995. There is no debt problem in the United States.
>...and the truely remarkable thing about all this strum und drang is that the people, the average person in the US is totally oblivious to what is going on. My god. We are really suffering the effects of a terminally rotten education system here in the US, and are deeply into the wonder bread world here. Brains have been replaced by giant pink twinkies in people's heads.
So, the average person disagrees with you, and therefore must have mush for brains? I fail to see the logic in that statement. Any rudimentary student of history is aware that the contemporary American is legions healthier, wealthier, and yes, smarter than at any time prior. Your protestations, nay disappointment, notwithstanding. |
