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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (12387)	1/1/2002 3:29:27 PM
From: Ilaine	Read Replies (1) \| Respond to of 74559

I agree with you that GDP is not the best way to measure "the economy" but it does tell us something. As for unemployment, you're only partially correct. Improvements in technology causes fewer people to be needed for the same, or even a greater, level in production. Some people can adapt easily, some can't. Some Cobol programmers can learn C++, some can't. Some textile mill workers will find jobs working at Walmart, some won't. I used to work in printing - over the years I saw letter setters become redundant, linotype operators become redundant, engravers become redundant, color separators become redundant, layout and pasteup artists become redundant, and I got out before my own craft became redundant; good thing, too.

To: Don Lloyd who wrote (12387)	1/6/2002 7:50:20 AM
From: Don Lloyd	Respond to of 74559

mises.org The Austrian Economics Newsletter Fall 1999 Volume 19, Number 3 Real-World Economics An Interview with Frank Shostak "... AEN: Which aggregate money supply statistic do you think is the most reliable? SHOSTAK: I like the one spelled out by Rothbard in the late 1970s: money that permits instant conversion at no loss. Today this is covered by such aggregates as M2 and Money of Zero Maturity, or MZM. You need to make small modifications-removing short-term savings deposits-and you need to make allowance for institutional money. Using this measure, it's clear that the money supply has been bouncing back since about 1992, and in the first quarter of 1999, money growth reached as high as eleven percent. This suggests to me that America's economy is very unbalanced. When and how it will tip the other way can't be known, but it will happen. Most people, including people at the Fed, are focusing on whether inflation will return. But that is not the issue. The issue is exaggerated levels of investment, particularly in the stock market, that cannot be sustained. When the bust hits, you can bet that there will be more cries for the Fed to inflate. This will be a direct result of Milton Friedman's claim that the depression in the 1930s would have been prevented if the Fed had inflated. But he has it exactly backwards: it was the early credit expansion that created the conditions that led first to the boom and then to the bust. It was the first round of money printing that destroyed the pool of funding.... Regards, Don