To: James Strauss who wrote (42329 ) 3/5/2000 9:25:00 PM From: pater tenebrarum Read Replies (1) | Respond to
Jim, well, we're basically in agreement here...yes, fundamental change is occurring in the economy and the stock market to some degree reflects that. i don't know if you remember a previous post of mine regarding our place in the Kondratyev cycle...i believe we are in the 'false spring' of the downwave - the downwave begins with the inflation peak, which was roughly 1980, and brings on a period of disinflation attended by a massive boom in paper assets and technological innovation on a grand scale. the 'false spring' is a cyclical inflation uptick in the disinflation period, after which disinflation should return and eventually turn to outright deflation. Japans cycle is approximately 10 years removed from the cycle of the western world and it illustrates nicely what happens in the deflation period, i.e. economic recession/depression during which the private debt/malinvestment excesses of the disinflation boom are worked out (or rather, as is the case in Japan, an attempt is made to avoid the working out, thus unnecessarily prolonging the process...kind of like many of the misguided depression era policies in the US).
