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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: mcg404 who wrote (17848)	4/5/2003 10:11:03 AM
From: sea_urchin	Read Replies (1) \| Respond to of 81087

Thanks John. I guess that's the "stew" and the conclusion which can be drawn from "eating" it. I just don't know what is going to happen but "indigestion", if not something much worse, seems inevitable. You know, some while ago I made the analogy between the US economy and a patient in heart failure. Someone goes into heart failure because his heart is too weak and is consequently unable to meet the needs of his body. The condition manifests by fluid collecting in the lungs and the limbs and other signs of a heart which is unable to pump the blood adequately around the body. The situation in a failing economy is very similar. The power of the economy is centered on the amount of production and consequent employment effected by that economy. A satisfactory economy is typified by a satisfactory velocity of transactions ie blood flow around the body which, in the ideal situation, leads to more production and more employment (growth). When the economy fails there is a fall in production, a fall in employment and the development of "bubbles" ie collections of overpriced assets. These collections arise because the money in them is not required for any productive purpose. Quite clearly, the way to treat a patient in heart failure is to improve the strength of his heart and, likewise, the way to improve a failing economy is to increase production and employment. Adding more blood into the circulation, like adding more money into a failing economy, only serves to aggravate the condition. In the circumstances, it strikes me that a spin-off of the present war and the subsequent rebuilding of Iraq is a way to directly increase, and indirectly through "empire-building", US production and employment. If this is so, many of the fears about the failing US economy and the collapsing dollar could be unfounded. In fact, it would seem that the firm stockmarkets around the world and weak gold price already sense this.