Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Maurice Winn who wrote (21330)	7/16/2002 9:43:58 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 74559

<<Mike, as usual, continues to fail to understand the reasons for the irrational exuberance, which was not fueled by money supply growth but by bidding wars>>> ROTFL! Most of the bidding was being done by telecom carriers and cable companies WITH BORROWED MONEY Maurice...that's why they and the economy are in deep $HIT! <<Having been one of the bidders, I know that it didn't require me to borrow money or have an increased money supply to raise my price.>> Right, and DT in bidding $60 billion or so for 3G rights in Germany, asked "Can you take a check, or would you prefer cash?" <<Blaming it all on the great Uncle Al perhaps makes them feel better in some way.>> Can't blame it ALL on BubbleBoy...after all, he didn't TELL people to buy the worthless pieces of script they were so eagerly snapping up. He just loaded up the punchbowl, and let the drunkards....ERRR....INVESTORS have at it before driving home. <<If the critics were correct about the printing being responsible for the irrational exuberance, we would be right back in the midst of a boom right now, due to the rapid monetary relaxation and interest rate cuts. But we aren't.>> Wrong....there are limits to the power of the printing press, and they are defined by the point where additional debt creation no longer can generate sufficient cash flow to service itself. Happened in the South Seas Bubble, happened in 1929, happened in Japan in 1990...and in the U.S. in 1996-2000, RIP. Every bubble is a debt bubble; at the most elemental level they all require excessive credit or monetary creation. Once a debt bubble blows up, it takes time, and lots of it for productive human commerce and labor to rebuild capital stores and savings, and allow productive investment to begin anew. That's why they bubbles are so dangerous. The benefits are bestowed on a few, but the pain is distributed to many. Greenspan knew this and chose to ignore it, for that history will treat him most harshly.