To: joseffy who wrote (40887 ) 9/14/2009 7:06:39 AM From: Bucky Katt Read Replies (3) | Respond to of 48461 The addition of endless $trillions to the system worldwide has to inspire a little somethin-somethin... The book Bernanke's Test by Johan Van Overtveldt is a decent & suggested read. A few Timmyisms> The choice is between which mistake is easier to correct: underdoing it or overdoing it. Most consequential choices involve shades of gray, and some fog is often useful in getting things done. In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems. The plausible outcomes range from the gradual and benign to the more precipitous and damaging. A few Bennyisms> Quantitatively, outsourcing abroad simply cannot account for much of the recent weakness in the U.S. labor market and does not appear likely to be an important restraint to further recovery in employment. The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. There’s no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse. A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.