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To: Haim R. Branisteanu who wrote (54977)	1/8/2001 10:27:53 AM
From: pater tenebrarum	Read Replies (2) \| Respond to of 436258

Haim, i have no doubt that a re-inflation of the bubble will be attempted. but your analysis leaves out one extremely important factor: DEBT. there is too much of it, and the only way to achieve bubble re-inflation is by creating even MORE. Richebacher has calculated that last year $4,45 in new debt were created for every dollar in GDP growth. it is obvious that this simply can not continue. for comparison, in the 50's, 33 cents of new debt were created for every dollar of GDP growth. currently, for every dollar of GDP, $3,60 are traded on the stock market. these are unhealthy excesses, and the only way of doing away with them is a washout, a deep recession that destroys all the malinvestment the bubble has wrought. the solution is NOT to re-inflate the bubble and hope that reality will catch up with it somehow. as for tech investment, especially in telecommunications, much of it has likewise been financed with debt, and no commensurate cash flows that could possibly justify these investments are in sight. this is the problem besetting the entire global economy: the mountain of debt has become so huge, that the economy is unable to produce the cash flows needed to support it. i fully expect though that the authorities will fight the washout tooth and nail, and thereby make it much worse and longer lasting than it otherwise would have been.