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

To: Tommaso who wrote (70681)	11/17/1999 5:36:00 PM
From: pater tenebrarum	Respond to of 132070

Tommaso, i believe you are on the right track....basically there's global industrial overcapacity in almost every single industry, and that leads to a constant price war. meanwhile the extreme growth in money supply gets channeled into financial assets, real estate and a whole host of what is known as "misallocation of capital" in von-Mises speak. be it the sudden proliferation of new sports stadiums or the erection of feudal residences all over the map,or the extreme overbuilding of new hotels, the easy money does not inspire frugality and careful planning. at the same time the much-lauded wage restraint puts the average Joe ever deeper into debt. at some point i would expect the system to reach the limits of new credit creation however. i believe Mike pointed out the possibilities in an earlier post and i personally tend to agree with those who predict a loss of faith in the dollar as the global reserve currency to be a likely culprit. anyhow, the Greenspan Fed, by essentially eliminating the boom-bust cycle for a time has taken away the economy's ability to self-correct and thus has created the biggest credit and asset bubble of all time. eventually it will no doubt end in a major financial accident that may well take the global economy down with it. regards, hb hb