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To: RetiredNow who wrote (54991)	9/6/2001 3:23:31 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 77399

Mindmeld, you seem to know just enough to be very dangerous <g> Firstly, yes if all consumption slowed we would have a problem. Like maybe our favorite stocks would go down and we would have to find more esoteric things to post about than just cheerleading. If indeed we were able to keep posting. But this does not mean that savings in and of themselves are bad. Because it is savings that can be liquified in times of difficulty that prevent difficulty from tipping over into calamity and from there to crisis. Analogy: It is bad to try a high-wire trick carying yards and yards of netting. But it's wise to have a bit of netting far far below in case of a fall. The degree of wisdom changes slowly with the height of the wire, but discontinuously depending on whether you are or are not falling. Ask joe six pack who has no job and no savings and credit card bills to do some extra spending for the good of the economy. His response is probably to "Furk the Economy". Or words to that effect. Second, you have equated aggregate demand with the economy. A bit of a stretch to go that far, that fast. And finally your analysis of the cause and effect of Japan's problems trivializes an extremely complex issue, which is as much if not more wrapped up in cultural gauze and resource constraints as it is with trite western economic theory. At least, IMHO. John.

To: RetiredNow who wrote (54991)	9/6/2001 3:51:41 PM
From: GVTucker	Read Replies (1) \| Respond to of 77399

mindmeld, RE: However, economics 101 will tell you that spending, not saving, is a good thing. Economics 101 will tell you that there are no hard and fast rules about what is a good thing or a bad thing.

To: RetiredNow who wrote (54991)	9/6/2001 9:29:24 PM
From: bambs	Read Replies (2) \| Respond to of 77399

that's mad logic... we have a "negative savings rate". that is unhealthy, unsustainable, and has lead us to a credit bubble. as everyone goes out and borrows and spends you get a boom in the economy. corporations, the government and consumers have taken on massive debt over the last decade. they have spent money they don't have. think about this. look a the cost of owning a home when interest rates are 13-15% like they were years ago. then imagine the effect of lowering those interest rates to 3.5% it makes homes cheaper to own. so the price goes up. as the majority can suddenly afford $150,000 mortgages. As the asset prices rise, those that already own homes feel rich and spend. people move from home to home and end up with larger mortgages then they had before. with the recent drop in rates people have refinanced and take out a larger mortgage to get some new appliances or a new car. it's all funny money. it's plain to see. it will end badly. it's unsustainable. we are in the midst of a credit bubble that is beginning to burst. it will cripple us just like it did the japanese. make many slaves to debt. what will happen when rates can't go down any longer? like what happened in japan? game over..end of the pyramid game. greenspan and the boyz have made a very nice debt party. the hang over will be brutal. bambs