WHAT DO YOU CALL A DEPRESSION WHERE THE ECONOMY IS BLOATED WITH CASH...?
WELL THAT IS THE QUESTION ISN'T IT...
THE US ECONOMY NEVER WAS "STARVED" FOR CASH...NO ONE EVER TOOK THE PUNCH BOWL AWAY....
WE JUST THOUGHT THAT CHINA WOULD CONTINUE BUYING OUR JUNK PAPER FOREVER...AND IT ALMOST WORKED...
BUT WHAT HAPPEN...?
CLEARLY IT WAS A COLLAPSE OF ASSET PRICES... NAMELY, THE "GREATER FOOL" DIDN'T SHOW UP IN SEPTEMBER....AS EXPECTED...
AND THE SECURITIZATION TRADES COLLAPSED ...WHEN THE PONZI SCHEME HIT THE WALL...
EVERY SCHEME...REQUIRES A "GREATER FOOL"...AND THIS WAS NO EXCEPTION...
SO WHAT NEXT...?
THE CASH IS THERE...IN THE BANKS.... TO "RE-START" THE PONZI SCHEME THAT WE CALL THE AMERICAN ECONOMY...
BUT CAN YOU RESTART A PONZI SCHEME ONCE THE TRUTH HAS BEEN REVEALED...
NO ONE WOULD ARGUE THAT THE US ECONOMY IS "PRODUCTIVE" IN ANY WAY... THE US ECONOMY "PRODUCES" ONLY ASSET BUBBLES AND PONZI SCHEMES...
THIS ROUTE WAS TAKEN BECAUSE IT FAVORED THE RICH...AND IT AVOIDED THE EVILS OF ORGANIZED LABOR AND "WAGE INFLATION"...
AND THE MIDDLE CLASS DID "PARTICIPATE" IN THE SCHEME FOR A WHILE VIA THEIR 401Ks...AND VIA DAYTRADING AND PLUNGING IN STOCKS DURING THE VARIOUS BUBBLES...
IS "BRINGING THE BUBBLES BACK" A VIABLE WAY TO "RECOVER" FROM THIS DEPRESSION...?
PERHAPS...BUT I HAVE DOUBTS THAT THAT IS THE ANSWER...
WE CAN'T "BRING THE FACTORIES BACK" FROM CHINA... THAT HORSE HAS LEFT THE BARN...
SO CAN WE JUST BRING THE BUBBLES BACK INSTEAD...?
