Replies to post #39700 on Zeev's Turnips Patch-No Politics (ZEEV)

[Ste]

The mistake the Fed made was introducing liquidity in advance of the feared Y2K computer problems.

So many people in the computer industry knew the Y2K panic was a scam. Yes, certain things needed to be sorted out, but the catastrophe feared by many was never coming.

Greenspan must have had some seriously bad advice on this. That is why we are now in an overcapacity situation where money has been spent on the wrong things and people have trained in to the wrong careers or have retired and are no longer part of the productive economy.

Raising rates later was not the problem. In fact, keeping them low has allowed the bad companies to remain in existence, which makes it harder for the good companies to survive.

I think the Safe Harbor Act can share some of the blame too.

Complaining about why the bubble burst due to high rates is silly IMO. The bubble burst because that's what bubbles do. Blame the factors that caused the bubble, or better still look ahead to what needs to be done to improve the economy. I agree with Zeev's suggestion to slowly increase rates.

[Frank Pembleton]

My point in this entire morass of bearishness-- is that the markets don't go straight down. As for the yeller dawg -- I haven't seen panic buying from Japan like it was reported 6 months ago-- even after 20 year lows on the Nikkei, even after the reduction of deposit insurance at their banks. Are we seeing panic buying in place where gold and silver is money? India's imports are down year over year -- and gold as a commodity ain't so hot either, being that we are in a recession, jewelry demand around the world is down.

...and gold as a universal currency? lol! Gold as a momentum traders dream, oh yeah. There's no doubt that gold is being controlled by the bulls, if it weren't-- it would fall to Goldcorp's cost of production.

Regards,
Michael