User 509655

Is a Weak Dollar Creating a Bubble?

Pure gobbledegook! Try running your VISA up extrodinarily and see what impact it has on spending vs. saving/investing. How can the $'s value be sustained over time? I just don't see it. But the real question is the degree to which US irresponsible spending compares with others. My conclusion....signific... worse and that suggests (to me) Shell is correct and Adamson, though quite interesting, is seeking to make sense of the US' fundamental lack of faith in free market forces and regulatory controls such as bankruptcy.


On Nov 10 03:49 PM bob adamson wrote:

> Ralph Shell may be right to imply that there is a danger that new
> bubbles will form at some time in the next couple of years but this
> must be seen in context. The world faced a clear and present danger
> of rapid descent into profound deflationary depression chaos during
> the September 2008 to March 2009 period and the epicenter of the
> crisis in October of 2008 was the beginning of collapse of the secularized
> debt instrument and derivative debt bubble of colossal proportions
> that had accumulated within the investment banking industry. Paradoxical
> as it may seem to some, a necessary ingredient in the efforts to
> forestall this deflationary collapse was the stabilization and even
> moderate re-inflation of that debt bubble. This was necessary to
> give the world’s central banks and governments time to devise, among
> other measures, and implement a controlled ending of that bubble
> over time.
>
> In short, it is arguable that Shell and others are confusing the
> necessary efforts to support the underpinnings of the 2008 debt bubble
> with profligate measures that would gratuitously create new asset
> bubbles. It is true that the stabilization efforts described above
> may at some stage overshoot their mark as the government and central
> bank authorities try to time their transition from stimulus to institutional
> reform mode. This is not an exact science and it is better to risk
> some modest inflation arising (it is questionable whether this is
> yet occurring despite what Mr. Shell implies) than risk return to
> deflation by ending stimulus too soon.