I agree with you all the way. I am moving toward the idea that the hedge fund panic will exceed the typical stock market panic. I am thinking for now more about the domestic reprecussions for now, but the international dimension makes the whole thing even more combustable.
On Tue, Oct 31, 2006 at 06:08:10AM +0200, Patrick Bond wrote: > Michael Perelman wrote: > > holding down wages, which restricts the profitability of potential real > > investments. > > I cannot be certain but this kind of bubble may prove more intractable than > > a > > typical stock market crash. > > This I don't get, Michael. Holding down wages is the *only* way to > undergird ficitious capital formation with surplus value, no? Isn't the > question instead whether the inverse pyramid of fictitious capital that > builds up unevenly in various sectors (the NYSE today, real estate > yesterday, energy markets tomorrow) can continue to be shuttled here and > there, growing ever larger and more precarious, so that a 'typical stock > market crash' is thus averted through loose money, low interest rates > and yet more bubbling elsewhere, as seems to have been the > crisis-management strategy since Mexico in 1982, or the Dow crash of > 1987, or S&Ls in 1989 and real estate in 1990, emerging markets from > 1995-2002, the dot.com from 2000, etc etc etc? And then it's a matter of > whether the US current account deficit can continue its rise without > risk of a full run on the dollar? > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
