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To: Ilaine who wrote (15)	3/19/2001 2:15:47 PM
From: Mike M2	Respond to of 443

CB, Dr. Richebacher predicted the bursting of the SE Asia bubble in his Sept 96 and March 97 letters. The thai bhat collapsed in July 97 . His big mistake was to underestimate the ability of the US to prolong the bubble. It may sound silly but I think" the bigger the boom the bigger the bust" sums it up nicely. The next couple of years will put all economic theories to the test. I expect the Austrian perspective will get the recognition it desrves. we shall see. mike

To: Ilaine who wrote (15)	3/19/2001 2:18:44 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 443

CB - ...I think the "bigger the boom bigger the bust" stuff is silly. It's based on the belief that things move in cycles. ... To be consistent, you would also have to believe that the height achieved by an ascending swing after passing through the vertical has no relation to how much it was initially displaced before being released earlier on the other side. Or that if you spend two months' salary into debt, it won't take longer to recover than if you had spent only a single month's salary into debt. When almost any system is displaced from equilibrium, as in the case of a pendulum, for example, restoring forces are created whose magnitudes vary with the degree of displacement, although not to any particular formula. When the restoring forces are allowed to act the result is either a degree of overshoot which tracks the degree of initial displacement, or, in the case of no overshoot, more heat generated by friction for higher degrees of displacement. Regards, Don

To: Ilaine who wrote (15)	3/22/2001 2:08:33 AM
From: JF Quinnelly	Read Replies (1) \| Respond to of 443

The Austrian School economists were perhaps the only ones to predict the Great Depression before it occurred, and did so by watching the long credit expansion throughout the 20s. There were deflationary forces operating that masked the effect of the credit expansion, by keeping prices flat. If the Fed was simply watching prices they got a false sense of the effect of their policies, as the deflationary forces masked the effect of their monetary inflation.