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

To: GraceZ who wrote (49014)	1/7/2006 5:29:54 PM
From: Elroy Jetson	Respond to of 110194

You're back with more of your drug induced Monetarist clap-trap -- big surprise. Monetarists, and addicts like yourself, falsely believe that the creation of additional money out of thin air actually increases wealth, since everyone has more money. Nothing could be further from the truth, as John Law discovered to his irritation. When several trillion dollars of money is created out of thin air and pumped into real estate through loans to new buyers there is an "nominal rise in real estate value." This "nominal increase in real estate value" comes at the expense of monetary devaluation. There is no net increase in societal wealth or equity, merely a mirage. When home owners add additional debt to their homes and spend it, this is spending which is not funded by income. When Monetarists get lost in their rhetoric, or when you get high, its easy to lose track of the truth and come to the false conclusions you endlessly rant about. Very sad and pitiful, but far from reality. You have much in common with John Law -- addiction problems, belief in magical thinking, and an inability to admit you are wrong. However, unlike yourself, John Law did have an education. Even after John Law's irresponsible Monetarist policies destroyed the French economy impoverishing everyone, he still would not admit his ideas had failed. His refusal to live in reality was accompanied by a massive increase in his addiction to alcohol. .

To: GraceZ who wrote (49014)	1/7/2006 7:26:09 PM
From: kris b	Read Replies (1) \| Respond to of 110194

"They took out approximately 300 billion up to 2004 according to your chart but according to the drunks at the Joint Study for Housing Studies at Harvard they put 1.06 trillion into their houses in improvements and repairs between 2000-2004. Count it up yourself page 31." Your logic is flawed. You neglected to mention that the entire 1.06 was borrowed against the houses. So if the value of the houses went up (asset side of your ballance sheet) by 1.06, but at the same time the debt went up by 1.06 as well, the equity gain is ZERO. My friends are on the fourth house in this game. They never put a penny of their own money (They don't have any. It is all tied up in "equity in their houses") but piled up more debt against the three existing houses. Their aggregate equity never goes above 5% because they always mortgage up the difference as fast the appreciation allows. It is called a pyramid or Ponzi scheme. It works great when everything is going, up but kills you on the way down. Leverage is a two edged sword.