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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (31604)	5/8/2000 9:22:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

MM, i think malinvestment on a grand scale has occurred in the US as well. just look at the proliferation of new sports stadiums for example. also the staggering sums that have gone into dot-com cos. that will never earn a dime come to mind. and note, REAL interest rates in the US are NOT high. even official CPI inflation (which is understated via geometric weighting and hedonic pricing) is now running at 5,6% annually year-to-date.PPI is running at almost 12% annualized (including the things that go up in price, like energy) so the Fed is really not tight at all with its puny 6% Fed funds rate. in fact if you back out the statistical tricks the BLS employs, you probably end up with real interest rates being negative. no wonder credit demand is exploding. btw, the JGB had a yield of almost 8% at the height of the Japanese bubble, so they had lots of interest rate ammunition as well when their bubble burst.