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| Thanks for the story. IMHO, you just gave a perfect example of why we need to go through something like the 30s every so often.
The world economy is a chaotic system. It is extremely complex. A couple of the things, however, that should be expected is fractal behavior - and cyclic behavior. It's just the way everything seems to behave. For anyone interested, there is a fascinating chapter in a fascinating book - The book is "CHAOS: The Making of a New Science" and the chapter is "The Experimenter." The author is James Gleick. He describes an experiment where a very small tube of helium is heated very slowly. What is seen is exactly what a person sees when looking at the markets. The fascinating thing is that a tube of heated helium behaves similarly to the markets - or the weather, etc.
Now, these cycles are *necessary* for the long term "health" of the system. We cannot think that we can "manage" the system to avoid them. This, IMHO, is where Greenspan really went off the rails. The cyclic corrections are absolutely necessary, and when one is delayed, it *will* be made up for in a subsequent correction. | |
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Next economic question. WHY is debt so prevalent throughout the world today?
