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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (41435)	12/30/1998 9:07:00 AM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Shane, I post this link occassionally it is what Alan Greenspan had to say about the Fed's easy money policy during the 20's fame.org IMO the current excesses of the present bubble are far worse than the 20's there is no doubt in my mind it will end in disaster the question is when. The trouble with a bubble economy is it distorts the demand and output structure in a manner which is not sustainable. In SEA and Japan the easy money was put into industrial capacity to the point of excess capacity. In the US we see a debt fueled consumption bubble. The wealth effect of the stock market has encouraged consumers to spend more and save less. Over optimism leads to over indebtedness. Few people recognized the SEA bubble many referred to it as the Asian economic miracle. There is much talk about the lack of cpi & ppi inflation -the same talk we heard in the 20's and Japan in the 80's . The inflation of the 20's was in financial assets. One point that many overlook is that a credit bubble needs an everincreasing expansion of credit to maintain its stimulative effect but eventually this debt must be paid by the debtor resulting in less consumption in the future or by the creditor in the form of default. Another subject that I want to address in the future is the role of loan securitization in this unprecedented credit bubble- it has sown the seeds of disaster. Mike

To: Shane M who wrote (41435)	12/30/1998 9:18:00 AM
From: yard_man	Read Replies (1) \| Respond to of 132070

I think the federal reserve is in the pocket of big money banks and financial powers either by stupidity or more sinister reasons. It has been pure recklessness to let the money supply grow as it has been growing recently. Ultimately all the common people lose as the value of the buck will be hit. These things take time to happen -- in the interim Greenspan is a genius to many folks while he is destroying the prospects for reasonably good sustained growth 1 - 3 years out. The second surprise rate cut was made simply to bail some banks out of mis-steps with derivative positions. Instead of looking into all this crud as it was developing and preventing our banks putting the whole system in danger the Fed was an enabler -- now the idiots who speculate in this fashion think they have a blank check unless there were some private agreement to prevent it from happening again. Some people don't believe we were on the verge of a real meltdown in the financial markets -- don't you believe it. We came up to the edge and almost fell over it. What's different now? Not much. Some banks look a little better for the time being, but we still have all the same problems with us. A consumer led economy wholly dependent on ever larger bursts of credit and money creation to keep going. A good part of the rest of the world save perhaps Europe in a deep contraction. A stock market valued at more than GDP while our economy is slowing. The time for Greenspan to have acted was a couple or three years ago. Silly to just look at CPI and ignore what is happening to equities. Everybody will pay the price. You've got to understand -- I'm a real radical. I don't think some government entity unaccountable to the people ought to be able to create money on a whim. It is a license to steal -- and thievery is exactly what happened when Greenspan had the surprise cut thi year. Tell me you don't think the big banks got advance warning ...

To: Shane M who wrote (41435)	12/30/1998 10:48:00 AM
From: Lucretius	Respond to of 132070

Al's only responisibility is to protect our currency from debasement. The Fed chairman is NOT an economic czar. This is part of the problem.