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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (8622)	7/2/2004 12:01:43 PM
From: yard_man	Respond to of 116555

>>interest rates and the economy should be left to their own devices, to enable a clearing out of the malinvestments accumulated during the boom. what the Greenspan Fed and the BoJ have been, and are doing, is to add even more incentive for resource misallocation with their policies. that's also why this cycle will be such a grueling grinder of multiple recessions...although there's always a remote possibility of a cleansing via a systemic crash. << I'm not sure it is so much a case of incenting more misallocation as it is allowing a widening disconnect between capital allocation for finished goods and future demand for those finished goods (more damage in preventing reconciliation, than the actual misallocation?? ) -- the lengthening of this reconciliation at a time when supports for continued demand are faltering fast -- some producers of finished consumer goods will be like wiley coyote -- encountering Chambers 100 year floods, but like Heinz says -- its much worse this go round -- its the consumer this time -- not just tech capital spending that is seeing a realignment -- and if that is true, then the tech realignment never really was complete in the first place ... got guns ... and butter?? <g> And we've already had the biggest fiscal stimulus program EVER -- does anyone here really think a multi-recession grind down is probable?? I don't. I think a crash is coming ...