7.02.2009

Quote: on the economic situation

The biggest problem today [in our economic situation] is that nobody really knows what the value of anything is.
- Kermit Johnson

(Why yes, Dad, I *do* listen!)

1 comment:

Kermit said...

Well, you certainly got me smiling. (G)

There seems to be a huge amount of money wanting to invest in something other than government paper, but I think the uncertainties are holding it back. I say a huge amount because it seems that money is in such oversupply that, like any other commodity in oversupply, it is not worth much. It cannot generate any return. Because it is in the hands of people who want to invest rather than spend, it is not likely to result in inflation, at least as the government measures it. You could say that the inflation is currently seen in Tbill prices, and possibly in the stock market.

After spending many years involved in the commodity markets, I feel that a major cycle low needs to be put in to re-set the cycle as was done during the thirties. Psychology needs to be changed, and this seems to be what a cycle low is supposed to do. As I remember, the Old Testament, which contains a great deal of wisdom, refers to a time to build up and a time to tear down. IMHO, nothing has changed since those times. There was a chance to do it in 1987, but Greenspan "saved" us. It wouldn't have been nearly as bad as what we are looking at today, but, of course, it would have been politically impossible. It seems to be the same today, as the same basic actions are being taken. I fear that we are kicking the can down the road again. I also fear that the cycle low will have to be put in soon, and quite possibly, the longer we wait, the more severe it might be.

Good to know that you think I still have the occasional lucid moment, in spite of all the deet. (g)