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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: glenn_a who wrote (7637)	2/11/2004 8:59:29 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

<The Belgium Chemist Ilya Prigogine would say the system is approaching a "far from equilibrium" condition, where a very small shock could result in a systemic condition of high volatility and instability.> Yes, I think this condition is the key now, plus the fact that the Wizards have run very low on bullets, and in fact are using the wrong kind of bullets. In fact, to me it seems that the Wizards are resorting more and more to pep talks, lies, and techniques straight from the Goebbels school of propaganda. We will have to endure another one today, no doubt. I view this unfolding, not so much as small shocks, but a hoard of small and large shocks just overrunning the system. I also meant to expound on how the US monetary and fiscal policy has been a major factor in the global train wreck I see now unfolding. I just read where twenty million people a year are moving from the Chinese countryside to the cities. That's one Asian city the size of Philadelphia being built a month. That's overwhelming and unsustainable demand and stress on the world's resource supply chain. It's takes farmers off the land, and puts them into the export business. It is now causing a run on commodities and input materials. One trainwreck I haven't even mentioned is the scarcity of water in China. So the question begs, why has this happened? I think it's largely the credit bubble in the US feeding the demand that results in moving most of these two million people a month to town. Additionally and importantly, I believe it is also the moral hazard behavior engendered by years of bail outs, intervening in markets, and trying to abolish economic cycles. This is so acute that light bulbs go off in people's brains in China. They think, those American have invented a perpetual wealth machine. They don't even have bad years like we have out on the land, so this is a free ride, baby. Let's pack up, go to the regional city, and work in that toe nail clipper factory. We will do this until we just use up most of the metal, energy and food reserves on the planet, and just figure out the consequences later. Well, arguably "later" is arriving on the next train. This multi-front sustainability crisis, surely fits in with the far from equilibrium theory you mentioned. Far from equilibrium, trainwreck, and crack-up boom, all variations of the same unsustainable maladjusted disease. The Asians are increasingly aware of this, but are acting with too little, too late. The Wizards at the Fed, seem to be absolutely clueless about it, spending most of their time perpetuating the disequilibrium, and focusing on small issues in the scheme of things.