On Apr 16, 2:59=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
> On Apr 16, 12:39=A0pm, solon fox <solon...@[EMAIL PROTECTED]
> wrote:
>
>
>
>
>
> > On Apr 16, 12:01=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
> > > On Apr 16, 10:30=A0am, ZerkonX <Z...@[EMAIL PROTECTED]
> wrote:
>
> > > > On Tue, 15 Apr 2008 08:27:34 -0700, Jerry Kraus wrote:
> > > > > The patterns are strikingly parallel from the beginning of the
cen=
tury
> > > > > up to the 1970s.
>
> > > > Gold Standard go bye-bye. Money becomes separated from a
referenced =
value
> > > > standard to a value determined by control and manipulation.
>
> > > > The rest, as they say, is history.
>
> > > It's curious how people in the U.S. say we're not in a "Bear
Market",
> > > when the value of the U.S. currency has dropped by 50% in the last
> > > five years on international money markets, and the Stock Market is
> > > just about at the same level it was five years ago. =A0That's a 50%
dr=
op
> > > in effective market capitalization. =A0Not counting inflation.
>
> > It's a Gordian Knot of a problem. If the dollar were stronger, then
> > inflation would vanish and the economy would be fixed. But, in order
> > to strengthen the dollar, the Fed would need to raise interest rates,
> > which would kill credit and the housing market. A stronger dollar
> > would also cause American goods to be more expensive.
>
> > Nonetheless, you are absolutely correct in your *****sment.
>
> > As Europe now faces their own housing crash and banking problems, the
> > Euro will become devalued and the Feds will soon be forced to raise
> > rates in order to combat inflation. Let's just cross our fingers that
> > consumer confidence makes a miraculous rebound before summer. Look for
> > higher rates in the fall.
>
> > -solon fox- Hide quoted text -
>
> > - Show quoted text -
>
> There are two possible solutions, although they really must be
> combined, I expect:
>
> 1. Redistribution of wealth
> 2. New Technologies.
>
> The first is to some extent being effected simply by the collapse of
> the dollar, the markets and real estate.
This is not true. Net worth has fallen. Some would say that net worth
was exaggerated due to overvaluation in the stock market and in
housing. There has been no redistribution of wealth, just a net loss.
The top 1% of wealth holders are worth less. The middle class and the
poor have even less due to inflation and failing businesses. The list
goes on, but no effective redistribution of wealth from upper cl*****
to lower cl***** has occurred.
>=A0Those with assets have far
> less than they had a few years ago, effectively. =A0Although they may
> still chortle about how "things are about to turn around". =A0They
> won't. =A0Why would they? =A0Because Warren Buffet is buying stock?
> What's he supposed to do, give up and kill himself? =A0He's too old to
> bother.
Historically when over exhuberance occurs in the stock market, stocks
tumble, businesses struggle and consumers tighten their belts. The
housing market was already overvalued due in part to the availability
of risky and cheap credit. This is not the first time that we have
seen a correction in the housing market and it won't be the last.
Nonethess, when the economy is hit by these inevitable corrections, it
recovers. Why? Because people don't give up. They continue to work
hard and more often than not succeed.
>
> The second, new technologies, is to some extent a problem because of
> the absolutely ridiculous combination of tenure and peer review in the
> Universities. =A0The ultimate recipe for no progress whatsover in
> science or technology, at least in the Universities. =A0People who can't
> be fired, are the sole arbiters of the value of their own work, in
> their own field. =A0Why should they do anything, ever? =A0So, they
don't.
>
You are correct that new industries, new services are needed in order
to expand the economy and create jobs. But, you are wrong to look to
the universities as the sole purveyors of new technology. Sure, there
is a link between university studies and technology breakthroughs, but
it stems not from the halls of the university, but from the hunger of
innovation found in the American psyche.
> Perhaps both problems could to some extent be solved by job creation
> in the research sector with training paid for by some Government/
> Private sector combination.
Umm... perhaps, but I wouldn't look to Uncle Sam for any help. Uncle
Sam does a better job at helping people to retrain after the
innovation has already happened. He tends to always be chasing someone
else's ****rt tails and rarely recognizes the value of anything new
anyways.
Companies are loathe to invest in research unless forced to do so by
competition. Good strong competition keeps companies worried about
their future and looking for ways to improve.
It is the hungry entreprenuer who most often comes up with the break
away technology. Most entreprenuers move forward from failure upon
failure until they finally get it right. Existing companies fear the
failures and don't take the risks. Uncle Sam won't do anything unless
it is politically expedient.
>
> Otherwise, we are in a deep depression, with no way out.- Hide quoted
text=
-
>
> - Show quoted text -
Well, I disagree with you on all counts, but I still respect you. It's
good to dialog with someone who presents a different view in a
challenging and interesting way.
I wish I could cheer you up regarding your deep depression. :-
( Economic cycles rise and fall as surely as the tides, only with less
periodic predictability.
- solon fox
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