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To: Andrew G. who wrote (95963)	4/18/2001 5:12:42 PM
From: Mike M2	Read Replies (1) \| Respond to of 436258

Andrew, when credit is growing faster than income( ability to repay) there is a limit. In addition, much of the credit excesses are not used for productive investment but for leverage and consumption - a recipe for TL & EV. It is frustrating at times but there is a limit to this madness and the ultimate price will be severe. Heinz is right on IMO keep the faith. Mike ho ho ho

To: Andrew G. who wrote (95963)	4/18/2001 5:24:39 PM
From: Mike M2	Read Replies (1) \| Respond to of 436258

Andrew, gold-eagle.com some discussions of credit excesses by Doug Noland. mike

To: Andrew G. who wrote (95963)	4/18/2001 6:28:05 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

my argument is merely that we're beginning to run into the law of large numbers...it's that simple really. i repeat, if they successfully reflate again, the eventual debt induced crisis will only get that much worse. it can't be forestalled forever, as you erroneously assume. you mention one of the crucial points yourself: the ability to service the debt. in order to service a debt that has been incurred, a cash flow/income producing asset must exist somewhere in the chain. we are however just coming off the biggest malinvestment and consumption binge in the history of mankind, so there's now a dearth of such assets. even the better companies in the tech sector have seen their earnings collapse...quarter on quarter, the aggregate NAZ earnings have collapsed by 67%. i agree with you that the Fed, and the financial system in general, encourage predatory lending practices and leveraged speculation ad nauseam. that doesn't mean their bag of tricks is a perpetual motion machine.