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

To: Knighty Tin who wrote (87067)	12/17/2000 12:10:08 PM
From: re3	Read Replies (2) \| Respond to of 132070

with apologies to Boney M : There lived a certain Fed chairman in America not so long ago A clown with a printing press that was always go go go Most bears looked at him with terror and fear But to Wall Street bulls he was such a lovely dear He could preach at Fed meetings like a preacher Full of ecstacy and fire But he also was the kind of teacher Day traders would desire RA RA Alan Greenspan Lover of the bulls and clowns There was a cat that really was gone RA RA Alan Greenspan America’s greatest printing machine It was a shame how he carried on He ruled the American land and never mind Bill C He fueled a mania that was a sight to see In all affairs of the dot com set he was the man to please But he was real great when he had a bear to squeeze For the clown free zone gang he was no wheeler dealer They could see through the things he'd done And knew he was not a holy healer RA RA Alan Greenspan Lover of the bulls and clowns There was a cat that really was gone RA RA Alan Greenspan America’s greatest printing machine It was a shame how he carried on But when the nasdaq started to wither and clowns started getting margin calls the demands to do something about this outrageous man became louder and louder.

To: Knighty Tin who wrote (87067)	12/17/2000 6:30:21 PM
From: mishedlo	Read Replies (5) \| Respond to of 132070

Zeev's replies to me on the following link. BTW He is very bearish for next year, agrees 100% with th excellent post from Earlie a few days ago but this this is quite a bit off. I now think think the truth is in the middle somewhere, but the inflation theory is probably more overblown than not. Comments on this? mwhodges.home.att.net =========================================================== <<Misheldo, the US statutory limit on debt is $5.95 Trillion, does any one knows when was the last time the limit was raised? We still have another $250 B plus before another raise is due. When that is reached, you will know that the era of "paying down the debt" is gone. You should remember, however, that the "debt doom sayers" in the early 90' were warning of our debt going above $13 Trillion by 2000, so, something must have gone right. Sure hedonic pricing looks strange, but frankly it understates the increase in standard of living rather drastically. The fact is that your current desk top, which you can buy for well under $1500 (including printer, scanner etc.) would have cost more than $100,000 just 10 years ago, somehow that must be reflected in the deflator. The fact that now you are buying a Rio, or a digital camera, which were not even available 10 years ago is not even included in the basket (well digital cameras were available for $6000 to 10,000, but only businesses, printers and graphic houses used them and were not included in the CPI). The real question which is difficult to answer is what percentage of disposable income goes into what sector of the economy and how are these prices changing. The car you buy today with standard features such as CD player, computerized driving (speed, brakes etc.) is a much higher value product than you bought 10 years ago, but no hedonic price deflator is attached to that either. It is the same with your TV which today comes as a standard with 100 channels and a VCR, for the same price (actually smaller if you stick to the "luxury 17" that was the top of the line in 1980) as 20 years ago. Seventeen years ago when I moved into my new house I bought a TV for some $1200, just last year, I spent less than $600 for a TV which IMHO, is twice the value (larger screen, additional features etc.) No hedonic deflator is applied to it either. I would not worry too much about those articles. The only thing that does bother me is that the standards for hedonic pricing are not worldwide. As for software, if you expect to use it for 3 years, you should depreciate it over three years, not expense it, but in the long run, it does not really matter to the economy if you depreciate it or expense it, since you simply delay some of the expenses, after about five years, you run into a steady state where your depreciation expenses equal more or less what your actual expenses would have been. Actually, the government is extremely conservative in this accounting department, since they do not capitalize their own capital expenditures but expense these as they go (military equipment, buildings, airports, highways etc. are all expensed as built, not capitalized and expensed over the life of the assets). I estimate that the budget surplus could be another $150 Billions higher per year if they did what business is allowed to do, capitalize capital expenses. If the government was allowed to mark its assets to market, the balance sheet would actually show a huge excess. Just fear mongering. Zeev>> M