ONE PROBLEM WITH THE CURRENT SITUATION IS THAT MONEY HAS BEEN USED ALMOST EXCULSIVELY FOR SPECULATION FOR SO LONG...
AND ACTUAL PRODUCTIVE BORROWING HAS BEEN RARE...
ANOTHER WAY OF LOOKING AT THIS IS OVER-PRODUCTION AND OVER-SUPPLY...
MONEY IS REALLY ONLY GOOD FOR BUYING THINGS THAT ARE NEEDED... THIS IS HOW THE AVERAGE PERSON LOOKS AT MONEY... MONEY IS FROZEN DESIRE SO TO SPEAK...
IN THE SPECULATIVE AREA MONEY HAS A COMPLETELY DIFFERENT USE... MONEY IS USED TO BID UP OR BID DOWN CERTAIN ABSTRACT ASSETS...STOCKS, REAL ESTATE, COLLECTIBLES, ART, ETC.
IN SHORT, OUR NEED FOR REAL ECONOMY MONEY SEEMS TO HAVE BEEN LIMITED FOR SOME TIME BY HIGH DEBT AND LOW WAGES...AND OVER SUPPLY OF CHEAP GOODS FOR CONSUMERS...
BUT AS THIS HAPPEN...OUR USE OF MONEY FOR SPECULATIVE PURPOSES INCREASED MIGHTILY...
TO THE POINT WHERE MANY INDIVIDUALS WERE ACTUALLY SPECULATING FOR THEIR INCOMES!!
BUT SPECULATION HAS IT'S LIMITS... AND WE HAVE REACHED THOSE LIMITS... AT SOME POINT THE PONZI SCHEME HAS TO END... THE NEXT SUCKER DOESN'T SHOW UP...AS IN CALIFORNIA REAL ESTATE...OR DOTCOM STOCKS...
TO THE EXTENT THAT THE CENTRAL BANKS ARE TRYING TO RESTART THE SPECULATIVE BUBBLE THEY MAY BE HEADING FOR MASSIVE INFLATION...BECAUSE PRINTING MONEY WHERE THERE IS NO REAL NEED IS RISKY BUSINESS...EVEN FOR OUR BELOVED STOCK MARKETS...
HENCE THE LIQUIDITY TRAP ASPECTS OF THE CURRENT SITUATION...
WHAT IF NO ONE "WANTS TO" SPECULATE IN STOCKS ANYMORE...WHAT IF WE ARE AT A GENERATIONAL INFLEXION POINT...WHERE ASSET SPECULATION HAS BECOME PASSE...AS IT DID IN THE 1930'S...?!
ONCE A SPEUCLATIVE EPISODE HAS ENDED IT IS HARD TO RESTART IT... IT TOOK UNTIL THE 1950'S FOR THE 1929 CRASH TO LEAVE THE PUBLIC MINDSET... THEN SLOWLY SPECULATIVE FEVER RESTARTED...IN THE 1960'S...IN THE 1980S....THEN FINALLY THE BLOW OFF TOP IN THE LATE 1990'S AND EARLY 2000'S...
CONCULSION:
WHAT IF THE CENTRAL BANKS PROVIDED MONEY FOR SPECULATION...AND NO ONE WANTED IT!!
THAT IS WHERE WE SEEM TO BE NOW...
THE SPECULATIVE FEVER SEEMS TO HAVE BROKEN...AND IT MAY TAKE 20 OR 30 YEARS TO RESTART IT...!!
