Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (63635)	5/15/2010 4:15:09 AM
From: energyplay	Respond to of 217532

The four phase cycle is a reasonable first approximation... However, if we look at real economic activity there are at least two and maybe 3 additional parts to the cycle. The most important one: You can stay in the middle, near average or a little under long term growth rates for long time. The US in the late 1960s, part of the 1970s, and about 1989 to 1994. Often these near flat periods have considerable investment in technology, that has not yet got to critical mass to achieve returns, or the entry of large numbers of people into the workforce (baby boomers, women). The real economics change in these periods. But because of additional resources, productivity, people, etc. it is very difficult to get increasing or even constant ROI for many investments, so there is no boom for several years. The second one is economic activity can be stuck at the bottom for a long time before it heads up again. See Japan, and many other places. Many places saddled with heavy debt stay down until the debt is near to being worked off. The third and rarest category occurs when there is a moderate boom, and the stupidity / malinvestment is limited by fear that does not go away, so rare external forces, or luck. One example of the luck factor : in the late 1990s, banks around the world made about 400 Billion of investments in telecom, creating a massive glut capacity, especially in fiber optics. This later resulted in the crash of Global Crossing, among others. The banks were bailed out by rapidly increasing internet use, and got almost all of their money back, with some interest. Of course, this money then was used invest in sub-prime.... So the big cycle reasserts itself, but prosperity can rarely have a longer than expected lifetimes. Governments often try to keep boom from getting out of hand by taking away the punchbowl. While they are taking the punch bowl (formal local currency money supply) out the front door, people are wheeling in kegs through the back door (hot foreign money, ETF funds, financial innovations, etc.)

To: TobagoJack who wrote (63635)	5/16/2010 1:35:30 AM
From: average joe	2 Recommendations Read Replies (1) \| Respond to of 217532

youtube.com Howard: Say, answer me this one, will ya? Why's gold worth some twenty bucks an ounce? Man: I don't know. 'Cause it's scarce. Howard: A thousand men, say, go searching for gold. After six months, one of 'em is lucky - one out of the thousand. His find represents not only his own labor but that of nine hundred and ninety-nine others to boot. That's uh, six thousand months or five hundred years scrabbling over mountains, going hungry and thirsty. An ounce of gold, mister, is worth what it is because of the human labor that went into the finding and the getting of it. Man: Never thought of it just like that... Howard: Well, there's no other explanation, mister. Gold itself ain't good for nothin' except makin' jewelry with and gold teeth. Aw, gold's a devilish sort of a thing anyway. You start out to tell yourself you'll be satisfied with twenty-five thousand handsome smackers worth of it, 'so help me Lord and cross my heart.' Fine resolution. After months of sweatin' yourself dizzy and growing short on provisions and findin' nothin', you finally come down to fifteen thousand and then ten, finally you say, 'Lord, let me just find five thousand dollars worth and never ask for anything more the rest of my life.'...Here in this joint, it seems like a lot, but I tell you, if you was to make a real strike, you couldn't be dragged away. Not even the threat of miserable death'd keep you from trying to add ten thousand more. Ten you want to get twenty-five. Twenty-five you want to get fifty. Fifty, a hundred. Like roulette. One more turn, you know, always one more.