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

To: AC Flyer who wrote (17033)	3/19/2002 9:38:19 PM
From: JBTFD	Read Replies (4) \| Respond to of 74559

As a country, we are increasing our personal debt a lot faster than we are increasing our income, thus increasing our debt load more and more. This is not a good trend. That is the main point of the article posted by Baldur. Government debt was not a main part of the article. My main point was to Maurice that the 6 billion figure is irrelevant to a discussion of the US. As for the recovery, I think it is equally likely that later this year things will slump again. "Gentlemen, you have come sixty days too late. The depression is over"- Herbert Hoover in June 1930

To: AC Flyer who wrote (17033)	3/19/2002 10:23:48 PM
From: orkrious	Read Replies (3) \| Respond to of 74559

the US has lower debt as a percentage of GDP than at many times in the country's history and just about the lowest debt per capita in the developed world. Not sure about that, but how about this: Ned Davis Research recently provided some data that suggests just how high is too high.On January 31, 2002, the value of the Wilshire 5000 (which contains 6500 stocks) was $12.7 trillion, equivalent to 129% of GDP (GDP being $9.9 billion). While this is down from a peak 170.8% of GDP at the stock market's March 2000 bubble-high, it is far above the average ratio since 1925 of 54.5%.Ned Davis maintains that anything above 71.8% is "very overvalued." By way of historical comparison (a quaint notion in this day and age), this ratio was 86.5% before the 1929 crash and 79.2% before the 1973-74 collapse. At the beginning of the bull market that began in 1982, this ratio was down to 36%.-