Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (67890)	9/18/1999 6:57:00 PM
From: Knighty Tin	Read Replies (4) \| Respond to of 132070

Tom, Other than non-sensical, not much to comment on. The Japanese miracle of 1950-1989 was built on savings, not credit. Credit is like steroids. It doesn't make muscles (economic growth) itself, it just allows you to recover faster from your workouts while it gives you brain cancer. He is mixing up the workout with the workout booster. The natural guys with the 19" arms (savings) may look puny compared to the 23" armed roid ragers (from credit extension), but their economies can live to collect social security. <g>

To: Thomas M. who wrote (67890)	9/19/1999 10:11:00 AM
From: Mike M2	Respond to of 132070

Thomas, the trouble with a credit bubble is you need an ever increasing expansion of credit to maintain the stimulative effect at some point balance sheets become so strained that a retrenchment is unavoidable. In addition, once the stimulation of easy credit which has fueled inflation in financial assets and real estate in selected areas is gone we will experience the wealth effect in reverse ( tough love). Asset bubbles encourage people to spend more and save less than would otherwise be the case. In Japan and Asia the easy money fueled excess investment in industrial plant and equipment as well as real estate. In the US the easy money has fueled excess consumption just like the 20s. see note on this thread about expensive homes. I have said before that I have never seen a luxury home building boom such as what is going on in Fairfield County, CT. Everything about this bubble is oriented towards maximum gain today at the expense of our future. Mike