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

To: RocketMan who wrote (33567)	5/17/2000 10:16:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

well, let me add one more comment here: the '87 and '98 experiences seemingly have led Greenspan to believe that bursting bubbles can always be 'fixed' by the 'correct' policy responses. in spite of these two events i strongly disagree with that. in fact i believe that a certain degree of determinism is involved here, in the form of the Kondratyev wave. so once the time for the Kondratyev 'winter' comes, it will be impossible to avoid, just as has been the case in Japan. no-one can possibly accuse the BoJ of not having reacted 'appropriately' in the monetarist sense (i.e. drop rates, print money, etc.), nor can the Japanese government be accused of not having tried the misguided recipe of Keynes in the form of massive deficit spending. as can be seen, none of that has worked so far. and yet, i have no doubt that Japan will eventually emerge from the malaise, once all the malinvestments, bad loan overhangs and so on of the bubble years are wrung out of the system. but it is hubris to believe that every bursting bubble and its consequences can be countered successfully by the acts of a bunch of bureaucrats controlling the printing presses. you are right not to blindly trust in their powers, as everybody else seemingly does. btw, among the people who are knowledgeable about the K-wave there's an ongoing debate whether the 'winter' season has passed with the '98 low in commodity prices and inflation or whether it's still ahead and the current cyclical upturn in inflation is a 'false' spring, as opposed to the 'real' spring. i'm just saying this to point out that it is by no means certain that my view (winter is still ahead) is the correct one. just to illustrate what i mean by the Kondratyew seasons, the depression of the 30's was a 'winter' season, '49 to roughly '72 the 'spring' (moderately inflationary) the summer, or peak inflation period followed and ended in '82, and it's been 'autumn' since (disinflation). spring and autumn are periods that are kind to stock market investments. summer is the time for hard assets...and obviously winter is most devastating for stocks. good night!