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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (15678)	6/2/1999 9:55:00 PM
From: pater tenebrarum	Respond to of 99985

Don, obviously many things are different today. the reason why i dredged up the 20's is because many things are also very similar. the main similarity is human nature...it will never change. and manic greed is always eventually replaced by manic fear at some point. productivity has risen by 43% in the past ten years, inflation was conspicuous by it's absence, margin debt is at record levels...sound familiar? the state of affairs just described was that of 1929. it is interchangeable with today's state of affairs, including record high stock valuations(today's are btw a lot richer)with the main difference that the checks and balances provided by modern laws and institutions would probably help to avoid a replay of the depression(today's banking system and the federal deposit insurance scheme e.g. make a run on the banks highly unlikely). what we see today is beyond doubt a bubble economy. here are the features that describe it(quoted from K. Richebacher): first, money and credit expand vastly in excess both of savings and GDP growth; second, inflationary pressures are channeled to, and concentrated in,asset prices; third, low or falling consumer- and producer price inflation keep monetary policy too loose; and forth, soaring asset prices overstimulate domestic borrowing and spending. all four of these features were evident in the U.S. in the late 20's, in Japan in the late 80's and now again in the late 90's in the U.S. all manias look the same, no matter what technological advancement was achieved in the meantime. so it is very much legitimate to compare them. regards, hb