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Hello Kent and Mark,
You guys always suck me into these weekend debates. I'm w Kent on
this one. The deficit issue is red herring. US deficit has been at
small levels vs GDP in the last 30 years. What's more, national debt
is a bit misleading as we do not account for national assets--schools,
highways, various infrastructure. Research shows deficits (within the
range we have had) have little or no effect on the economy. Witness
the period 1980 thru 2000--or as I call it the Reagan expansion. He
was beat up about increasing defense spending, increasing the deficit
and cutting taxes. the sky was going to fall according to the Dem's.
Son of gun--the deficit disappeared because of tax receipts at reduced
rates and the Soviet Union tanked.
On the inflation score, seems to me what we know as inflation is oil.
In 1973 OPEC stuck it to the world and the cost of everything went up.
It eventually got digested and costs began to increase at acceptable
rates.
Best regards,
Jim Johnson mailto:jejohn@xxxxxxxxxxx
--
Saturday, December 14, 2002, 2:37:13 PM, you wrote:
>> over the DEFLATIONARY
>> ("Hello, Japan !") PPI numbers coming out of the statistical mills ?
>>Massive inflation is one cost to consider.....because without fiscal
KR> So that's it? It either unrestrained deflation or massive inflation?
KR> You're not sure which one but you're darned sure it's going to be one or the
KR> other. I guess a moderate inflation environment is out of the question.
KR> Either the Fed is out of ammo or they will have to "print money like crazy".
KR> There's no in between. There's no option like
KR> "print-a-lot-of-money-to-keep-us-from-tipping-into-deflation-and-then-slow-d
KR> own-some".
KR> FYI: The debt and deficits have been much higher as a percent of GDP than
KR> they are right now and corporations were able to borrow just fine.
KR> The real danger is consumer debt and the impact that may have on the banks
KR> if the consumers crumble.
KR> Considering that we have had only one depression in the last 100 years, the
KR> odds are that we will not have another one. I don't believe "the
KR> government" is the solution to very much. But I do believe that Greenspan
KR> understands what levers to pull if things do get too far out of whack. And
KR> I believe the Bush is going to press 100% on more massive tax cuts and maybe
KR> even a major tax system overhaul. Tiny Daschle will do everything he can to
KR> keep our taxes high but my money is on Bush.
KR> But here's what I really want to know: if you believe all this doom and
KR> gloom, what concrete actions are you taking in your personal life to prepare
KR> for them? Seriously. Have you sold you house and loaded up on gold? Have
KR> you cut all your personal debt? Are all your holdings in cash right now? I
KR> want to know how seriously you believe in what you are saying, even though
KR> you're saying two completely opposite things.
KR> Kent
KR> ----- Original Message -----
KR> From: "M. Simms" <prosys@xxxxxxxxxxxxxxxx>
KR> To: <realtraders@xxxxxxxxxxxxxxx>
KR> Sent: Saturday, December 14, 2002 1:00 PM
KR> Subject: RE: [RT] "feel the panic"....
KR> So you are confident the government will solve the problem then ?
KR> Maybe so, but at what cost ?
KR> Massive inflation is one cost to consider.....because without fiscal
KR> restraint, deficits will balloon to incredible proportions......and
KR> corporations will not be able to borrow at a reasonable cost.
KR> The only course of action remaining will be to print money like crazy....
>> -----Original Message-----
>> From: Kent Rollins [mailto:kentr@xxxxxxxxxxxxxx]
>> Sent: Friday, December 13, 2002 10:01 PM
>> To: realtraders@xxxxxxxxxxxxxxx
>> Subject: Re: [RT] "feel the panic"....
>>
>>
>> Simms, have you sold all your material goods and moved to a shack in the
>> mountains? We had a real estate crisis in the late 80's too. We
>> formed the
>> Resolution Trust Corporation and resolved the problem in a few
>> years. Japan
>> is still thinking about getting ready to talk about studying some
>> suggestions the Americans keep making for one day developing a
>> plan to begin
>> to start considering a lunch meeting on their problem. Please tell me
>> you're living in a shack.
>>
>> Kent
>>
>>
>> ----- Original Message -----
>> From: "M. Simms" <prosys@xxxxxxxxxxxxxxxx>
>> To: "RealtradersList" <realtraders@xxxxxxxxxxxxxxx>
>> Sent: Friday, December 13, 2002 4:15 PM
>> Subject: [RT] "feel the panic"....
>>
>>
>> Couldn't you just "feel" the market getting the wind knocked out
>> of it today
>> over the DEFLATIONARY
>> ("Hello, Japan !") PPI numbers coming out of the statistical mills ?
>>
>> Non-healthcare related businesses have no pricing power....
>> and no volume revenue growth....
>> all they can do is cut payroll and cut costs.
>>
>> Ultimate solution is to cut government spending and reduce government
>> size....so that taxes can be reduced.
>>
>> Yeah, right. NOT IN THIS LIFETIME.
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