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

To: Cogito who wrote (87243)	12/19/2000 9:39:56 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Allen - ...What I don't see anyone mentioning, though, is the very low unemployment rates we've seen in the past several years. ... The key word is rates. With the government school system in a state of collapse in most cities, both its graduates and its dropouts are, in many cases, not legally allowed to hold jobs that are consistent with their starting skill sets. Unable to justify being hired at a legally mandated minimum wage and acquiring on the job training, they literally have no choice except to join the untaxed underground economy, the drug trade, and other criminal enterprises. Needless to say, they do not sully the pristine official unemployment statistics. Regards, Don

To: Cogito who wrote (87243)	12/19/2000 10:58:10 PM
From: Skeeter Bug	Respond to of 132070

>>can one argue that there has been no real economic growth in the past eight years?<< allen, i've been on this thread for 3+ years and i've never read anybody argue this. the economy is growing at about 2-3% using economic numbers. think how silly it sounds to have 50% of gdp growth come from 0.5% of the economy - computer production. beyond that, my home computer is off 20 hours a day. how was this factored into hedonic pricing? i can type no faster on a 1.4 ghz box than on a p200 - how was this factored in? see the nonsense created here? all to "proof text" alan.com's paradigm.

To: Cogito who wrote (87243)	12/20/2000 12:07:33 PM
From: Mike M2	Respond to of 132070

Allen, as Kit mentioned both parties are bought and paid for. I don't want to let politics cloud the issues that will affect all of us. Tough love does not care about party affiliations. The impact of hedonic pricing has been noted by the OECD, the Bundesbank, the British equivalent of the BLS - the name escapes me. One can easily see the impact of hedonic pricing by going to the CommerceDept. " Survey of Current Business" the numbers are given for current and chain-weighted GDP - very sobering figures. The economists of the Austrian school see the US economic boom as a debt fueled consumption bubble. The trouble with bubbles is that they engendered unsustainable borrowing and spending binges which distort the demand and output structure of the economy leading to malinvestment and excess capacity. i suppose a crude analogy would be using steroids for body building or using amphetamines - in the short run you get quick results but do damage to your health longer term. The Austrian school defines inflation as an expansion of money and credit beyond the supply of available savings and needs of economic growth. Sometimes the credit inflation can impact product prices sometimes ( now) it hits the financial markets. The wealth effect of the stock market bubble has caused the savings rate to go from 8.7 % to slightly negative but has turned up a bit since the Nasdaq peak in March lower savings means more consumption and less investment for the longer term. In addition we have seen the public sacrifice liquidity by stampeding out of insured bank accounts into the stock market - as long as prices rise there seems to be infinite liquidity but when there is a stampede for the exits that illusion of liquidity disappears. Look at AAPL collapse 50% on a warning. Another consequence of the bubble is an unsustainable trade deficit and record current account deficit. The gold issue is complex and i will be happy to give you links for further reading but a quick summary is there is a strong inverse correlation between the value of the US dollar and gold. Foreign central banks have enabled the gold carry trade where speculators can borrow physical gold from central banks at a cheap rate sell the gold into the market thereby depressing the price of gold and invest the proceeds in higher yielding debt -usually U.S. treasury bonds the result is the rpice of gold is depressed and the US dollar is strengthened. In addition, many bullion banks have persuaded gold producers to sell forward their future production further depressing the price of gold. Why did Alan Greenspan state in his Humphrey Hawkins testimony state that central banks stand ready to lease gold in increasing quantities should the price rise. Before you dismiss the austrian school and gold I suggest you read a few articles where Greenspan was once a believer in Austrian economics and the role of gold in my next note. I will not spend time defending my views on gold but will provide links for reading which have helped to shape my strongly held convictions. As I noted i am unable to type so it is time consuming for me. Mike