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

To: LLCF who wrote (13857)	1/24/2002 5:41:49 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

DAK, true, the forced selling at the bottom is the crunch, but the problem arose from pursuit of the faulty idea at the top. So, buying land at excessive prices, building support structures, planting and tending kiwifruit, hiring people was the faulty idea [in the last stages of the boom]. The crunch was the mortgagee sale and removal of the vines and structures and conversion back to grass. The bust was bound to happen when the decision to invest was made. So, the cause of the economic crash wasn't the forced mortgagee sale. It was the decision to buy. The expenditure represented wasted effort by lots of people, which is capital destruction and the cause of busts. Mq