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

To: Ilaine who wrote (13862)	1/24/2002 5:26:10 PM
From: Mike M2	Read Replies (1) \| Respond to of 74559

CB, you complain about my lack of commentary and then you complain to others for not offering links or proof! I am unable to type I can only hunt & peck so i keep my comments short. I have read about the austrian school of economics enough that I am convinced that it is sound. i would encourage others to learn about it so that they can convince themselves. Credit inflation creates a boom which distorts the demand and output structure. By keeping interests artificially low it allows overinvestment in some areas creating excesses so that investments that were thought to be sound prove to be unsound ( malinvestments). since these once profitable investments are no longer profitable the creditworthiness deteriorates and may even lead to defaults. Note that the Japanese bubble and the SE Asia bubbles cannot be blamed on the gold standard nor trade wars but there is a common theme credit excesses. The austrian have an excellent record for recognizing bubbles are not always great timers. The austrians consider the US economy to be a bubble economy for many reasons, record low savings rate, huge trade & current account deficits, credit growth vastly in excess of GDP growth, overinvestment in tech related areas & retail, excessive consumption. I suppose now you will demand a list of links to back up my assertions- I won't take the time. I am happy to suggest furthers readings for those who are interested but have no interest in endless debates. Mike