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To: pater tenebrarum who wrote (82450)	3/19/2001 6:46:46 PM
From: Ilaine	Read Replies (1) \| Respond to of 436258

Heinz, in light of the fact that you are in Austria, I am interested in whether you have seen much written about the collapse of the Reichsbank and Credit Anstalt after the Bank of International Settlements started collecting reparations in 1930. I just started looking at this - I can find a lot about the Reichsbank but almost nothing about Credit Anstalt. I am reading commentary that the collapse of these two banks is what tipped what would have been a recession over into the Great Depression. I see that von Mises wrote a book explaining the reasons for the collapse of Credit Anstalt but it doesn't appear to have been translated into English.

To: pater tenebrarum who wrote (82450)	3/19/2001 11:06:04 PM
From: ahhaha	Read Replies (3) \| Respond to of 436258

my issue with the 'new economy' claptrap is that it somehow keeps implying that the economic laws have changed. they haven't. Claptrap implies economic laws have changed. Is this coherent? but deflationary depressions are not amenable to intervention by central bankers anyway. How would anyone know whether that's true? It's never been tried. You are making the demand management school's error by assuming that interest rates are rigidly inverse to money supply. Japan makes the same mistake. Why should lowering interest rates increase money supply where there's low demand for loanable funds? You are implying that a rich man who has a personal philosophy of paying cash will take a loan if rates are low enough. ..meaning, i don't think it would have made much of a difference had they stood pat in late '31. just look at corporate bond rates, which soared in the early '30's, and are outside of the Fed's ambit.the market priced in the increasing default risk, and in the process made corporate borrowing prohibitively expensive. Are you saying that aggressive money creation in the form of currency wouldn't have lowered bond yields? I think it would because the currency's effect would be to increase final demand which certainly would have gone a long way to restore confidence. A restoration of confidence would cause bond yields to fall in proportion to the degree of restoration. Instead, the government punished consumption in a myriad of ways in order to chase a wild goose. i do agree that both Congress and the administration made a series of mistakes, the most glaring of which was the Smooth-Hawley act that killed off international trade. i also concur that the Fed (or someone, i.e. the brokers)should have raised margin requirements, but as far as i know it didn't have that power back then. that would have alleviated the severity of the public's losses, but it is debatable if it would have stopped the speculative blow-off or the subsequent denouement. Th FED raised rates in '28 and '29 to 6% and that was the internal cause that made the stock market heights untenable. note that the Fed AGAIN didn't raise margin requirements in the 90's boom, presumably out of fear that it might actually precipitate a crash and be blamed for it. This is your presumption and it's wrong. Margin wasn't that big of an issue in comparison to '29. Institutions dominate our markets and they don't use margin in the way the public did in the '20s. The biggest fault of the FED recently was to allow the M2 money supply to grow too rapidly and it was that which enabled the speculative psychology to rage. Fixed money growth and non-interference in money markets would have kept the cost of money in equilibrium and the fear of god near. the most important point though is that it was not the mistakes made after the boom ended that were primarily responsible for the severity of the bust - it was the profligate monetary/credit policy DURING the boom that created the imbalances that led to the depression. Above you make somewhat a counter claim to this. i agree 100% with that. More like 90%. in a deflationary depression, interest rate policy becomes powerless. But above you imply no monetary policy would avoid deflationary depression. I think this is wrong. If monetary authority insists on interference, then they have to interfere in both directions. Indeed, this is the cause of the excess amplitude of the business cycle. Interference means not only compensating for the tightening of interest rates to slow speculation with its untowards economic repercussions that was done before the crash, but also compensating for lame Congressional laws which penalized output and final demand before the depression. it is the willy-nilly credit expansion of the boom that lays the groundwork for the bust. Credit expansion is always a self-correcting process and requires no central bank interference to implement. Neither does credit contraction lead to collapsing economy. Why should it? Why should the natural slowing of credit extension lead to chaotic economic outcomes for even those who are not on credit? The economic history of the US since the '30s shows there is no economic chaos during credit contractions. The proof can be seen in C&I loan totals or other summary measures of credit over the last 60 years. At the economic worst point, 1982, all you see is a mild slowing in the rate of growth of credit. note: the link doesn't work. no, there was disinflation, bordering on deflation in fact. General prices either rise or fall. Disinflation was a oxymoron term created to diffuse the fact that the central bank has to refrain from interventionism if they wish to achieve 0 inflation. There is no meaningful definition of the term. During the '20s general prices were remarkably stable. If one wishes to claim that disinflation means a deceleration of the rate of growth of inflation, then it isn't applicable to the '20s. but the Fed made the mistake to fight it, by leaving monetary policy too loose for too long following the '21/'22 recession. You imply you are non-interventionist and yet you think intervention is right. Did you not say they and the Congress were "laissez-faire" then? Did you not imply that such non-policy helped to create the prosperity of the '20s? Until the market rise of '27 the FED was not involved, but when stock prices were getting untenable, they thought they had to intervene. They weren't reacting to a failure earlier to pro-actively constrain lending when they later tightened. Their sole intent was to reign in the stock market. in conclusion, we agree of course fully on the meat of it all - namely that interest rates (and consequently the money supply) should be left entirely to the market, not be subject to an arbitrary 'target' deemed appropriate by a central economic planning agency. But we don't quite agree here. It is the central bank's proper responsibility to manage the money supply. Money growth should be fixed at a rate around the 2% added value rate provided by the effort humans. 2% isn't a critical value or necessary value. It could be 0%, but it can be shown that setting it at the added value rate is optimal. You can make great errors with guessing the proper fixing rate of money with little consequence, but you can't do the same with interest rates. So it isn't important at what rate growth of money is fixed. The real issue is the constancy of growth of money supply over time. This allows interest rates to wildly fluctuate instantaneously which results in almost no fluctuation over time, that is, no trends or cycles. The market fully corrects intraday, fully contains all possible rational extrapolations, and thus randomly walks and by so doing achieves the ideal of perfect equilibrium. Economic activity will always cycle because the cycle is the most efficient path of action between two points, but with stable interest rates, the amplitude of the cycle is so small it isn't worthwhile locating it. Probably the current interventionist pretense to knowledge will continue for about 50 more years and then it will die. Not by choice but by becoming superfluous just like the Soviet Union did in the political arena.

To: pater tenebrarum who wrote (82450)	3/19/2001 11:49:48 PM
From: Jumper	Read Replies (1) \| Respond to of 436258

Cramer tossed from Bottom Slapping Game Boat - Producers Cry Baah! 3-19-01- Hollywood Reporter- Reuters Transcript - Myth Man: I'll turn this over to associate producer Merv Griffin and host Chuck Woolery in a second - Sam Donaldson: Question! Myth Man! As co-producer of this raunchy lust boat - How can you compete for Cash Prizes? Myth Man is this game rigged? Myth Man: Sam, I play this game simply for pure pleasure and I'm proud to say that when I see a good looking Bottom - I slap it firmly. From time to time I may win cash prizes, unfortunately, per. the advice of council I am unable to answer at this time - please direct those questions to the firm of Luc & Luc, Inc. I have prepared a brief statement,...I will read that for you now. At approximately 3:16AM Monday morning, following an incident with Contestant Cramer that can only be described as deeply disturbing, Mr. Cramer was handed over to members of the United States Coast Guard in the NY Harbor. Mr. Cramer is managing editor of BuyHigh-SellLow.Com The incident took place during filming of the highly anticipated "Bottom Slapping Game" - HBO has informed us that our broadcast contract has been terminated - and although the "Bottom Slapping Game" will continue to film episodes for a few more weeks. Tapes of these episodes will only be distributed to private audiences at select New York & New Jersey nightclub locations. Select transcripts, at our discretion, may be posted to the Clown Free Zone and the Naked Truth Threads only. Merv Griffin: sfgate.com "Jimmy Jones Cramer did us all a disservice. We had a live studio audience on the boat and frankly, the viewers found his displays of self gratification highly disgusting even before Cramer "went into" his vile contortions during the bonus round. We knew going into the production of the "Bottom Slapping Contest" that Cramer had issues, unfortunately this depraved lunatic lost control in the bonus round the moment our cameras started rolling. Chuck Woolery: wvah.com We did everything we could to accommodate this popular Wall Street Clown - after all, this joker is managing editor of BuyHigh-SellLow.Com! for crying out loud! Everyone knows he has been struggling to determine the difference between a bottom and a top - executive producers Myth Man & Tony S. decided to place him in a room with RuPaul and Ed Koch to see what would happen. Sam Donaldson: What did happen? Is there any truth to the rumor that Ed Koch and RuPaul are dead? Merv Griffin: No...No...Koch is recovering in intensive care after a stroke and RuPaul is being treated at a local Trauma center. All of Cramers actions were carried out upon himself! Other contestants of the "Bottom Slapping Game" were not phycialy harmed -... ...my god, it was vile.......excuse me...these people were locked in a room...Cramer turned on himself...disgusting...excuse me...I am about to disgorge! Sam Donaldson: Is HBO toast? How do they intend to compete against ABC's hot new reality show Temptation Ranch - filmed on location in the Appalachian mountains? Chuck Woolery: Sorry, this press conference is over! Not the shoes Merv' not the... ****************************** The names "Merv Griffin", "Merv Griffin Gaming & Entertainment", "Bottom Slapping Game", & "Lace by Marv Albert" are registered trademarks of Tony Soprano Worldwide** Please visit other fine gaming establishments from Myth Man & Tony S. lvrj.com