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

To: valueminded who wrote (59334)	5/14/1999 10:35:00 AM
From: Mike M2	Respond to of 132070

Chris, government debt can be monetized private debt cannot. It is true that private debt can be paid back with cheaper dollars in the future. When I speak of deflation I am referring to a contraction in credit which will lead to falling asset prices. There is a limit to credit expansion in the private sector -at some point you must pay that debt or default. One fact overlooked by new era economists is that a credit bubble requires an ever increasing expansion to maintain it's stimulative effect. At some point the market mistress will impose discipline. mike