Y2K Dude <123@321.com> wrote in message news:3877be69.351426975@news.gte.net... > > I believe what we all have here... is a simple falure to communicate. > > Before ya'll kill the messanger maybe you should read the message. > > What Mr. Milne is saying, is not that far off from the truth. Read the > following article if you are interested in getting a second opinion on > the subject. > > http://www.mises.org/fullarticle.asp?control=317&month=13&title=+Will+the+Bu bble+Pop%3F&id=16 > > >

Not only is it not far from the truth...it IS the truth

"Devotees of von Mises, Hayek and Rothbard would recognise events of the last four years as nothing more than a classic, interventionist, credit expansion and would warn of the inevitable consequences when the process stutters to a halt."

"Stock returns of late have been such as to banish all rational calculations from the mind of the public. "

"It is all a long way from the cautionary words of Graham and Dodd who asserted in their investment bible, Security Analysis, "Value based on a satisfactory trend must be wholly arbitrary and hence speculative, and hence inevitably subject to exaggeration and later collapse."

"Less academically, America is a nation which has so outstripped its own productive capacity that it has seen the current account balance deteriorate from a deficit of around 1.5% of national product just four short years ago to 3.7% today. It is a nation where household debt has risen from two thirds of income in 1987 to over 82% today, where the level of mortgage debt as a proportion of income has been raised to a new height of 62% from 38%, where consumer credit is well over a trillion dollars, where over a third of "savers" borrow against their 401(k) retirement nest-egg. Americans are consuming capital on a vast scale. They have become a nation of Tomorrow Eaters"

"If Americans collectively wish to rearrange their balance sheets in the pursuit of the greatest degree of the satisfaction of their wants, that is their privilege. The darker side is the debt explosion and here we can blame none other than the Monetary Messiah himself, Alan Greenspan."

"In the last four years, commercial paper outstanding in the U.S. has doubled .."

"At the apotheosis of this process in the past year as the sluices were opened to offset the LTCM debacle, domestic financial debt increased a mind-boggling $1.1 trillion, or fully 20% of the total existing debt stock. "

"When Greenspan took up the reins, financial debt was 95% of non-financial corporate debt: today, the ratio is 174%. Then, it represented some 39% of national income: today, the figure is 80%"

"Concomitant with this credit inflation has been the inexorable rise of the stock market's Q-ratio - its own proportion of GDP - from an unexceptional 54% to today's towering 155%, or its expansion from under 30% of the world market capitalization to a shade under a half now."

"Monetary pumping on this order, as the Austrians will tell you, leads to serious distortions in the price structure of an economy which cannot be captured in crude, aggregate, index numbers. These distortions between the value of goods, present and future, lead to mal-investments and a clustering of false decisions. Factories built and productive processes put in train based on a market rate of interest artificially lowered by the effulgence of fiduciary media are not backed up by real savings and thus become misaligned with a propensity for consumption which has, if anything, intensified. A raft of 'entrepreneurial errors' lies ahead."

"This means not only the prospect of half-finished malls, hotels and offices (factories are deliberately omitted since we have also witnessed a secular shift in the amount of construction dollars spent on premises devoted to redistributing wealth, rather than generating it in the first instance), but also completed, but now distinctly sub-par undertakings: businesses and plant which cannot possibly earn the returns projected at inception. Less visible, though more widespread, such an overhang will depress returns on capital where they do not wipe it out completely. The credit expansion, once it draws to its inevitable end, will impoverish everyone, everywhere."

"Recently, this realization has begun to dawn on the world's fiat money kings. BOJ Governor Hayami said in a speech a few months ago that credit was not capital and that while he could provide the first, economic recovery required the second"

"An over-leveraged system with high concentrations of assets in over-priced stocks is a recipe for disaster."

"When the Almighty Dollar, de facto totem of the world monetary order, can fall 18% in two months against the unit of a country which gives its currency away essentially for free, has severe demographic problems, no natural resources, a grid-locked and speculative political structure and a near-bankrupt fiscal position, we know that the end is near. "

"Credit-led business expansion has always ended in one of two ways; depression - which used to be a sharp, cathartic affair before the Keynesians and New Dealers and their successors at the MOF contrived to institutionalize it by preventing market adjustment--or hyper-inflation and a collapse of the existing monetary order. "

-----------------------------------

Like I said, we exist on an ever-growing unrepayable mountain of debt. And yes, when this one ends, it will impverish everyone everywhere.

Like I have written over and over and over, this is the economic context of Y2K. It is precisely THAT which is ignored and intentionally overlooked, especially by the gloating polly-come-latlies.

So far, there have been no apparent serious consequences of Y2k. That is....so far. The pollies think that because a mere seven days have gone by, an eye-blink, that all of the problems technologically and financially have been solved. of course, they are deluding themselves and simply enjoying themselves as they whistle past the graveyard.

We are in an horrendous and frihtening financial situation. A situation like none the world has ever seen before. We are awash in a sea of debt, buried under a mountain of debt, unrepayable debt.

What the author of the article is trying to say is that all of this has grossly obscured the truth of the situation and inevitably results in malinvestment. This is not the 'malinvestment' that results in a mere lowered return but the type of malinvestment that causes collapse and a concommitant impoverisation of everyone because of the severity of the previous foolishness.

This has always and inevitably been the result of a credit expansion like this AND inevitably the result of fiat money.

The pollies are content to gloat and sing and dance after seven days. They refused to prepare and they refuse to look past the ends of their noses. They look only at today and not at tommorrow.

"See! See! Nothing happened! You were wrong!"

Not so fast, and not on your life. Tommorrow is coming to all you short-sighted gloating dancers.

Specious Keynesian economic 'remedies' have irreparably harmed our economy. They have forestalled appropriate corrections which were good and healthy and postponed the day of reckoning.

What Greedspin and his predecessors have done is no more than shore up the slag heaps burgeoning over the little coal-mining town with collar-stays. Instead of having carted away the mess it has grown to unmanegable proportions which will inevitably landslide and destroy everything in sight.

To Y2k Dude: They don't want to know the truth. They can't handle the truth. It is too unpleasant and will spoil their little fantasy that all is well in La-La Land. It would hamper their plans and expectations to see the real picture. It might mean that they would have to prepare and they don't want to hear that. No. No. No. They do not want to hear that.

No skin off my nose. I'm prepared. We only have a little more time.

(Oh and notice very carefully, that NOT ONE of those who respond to my post will take issue with any of the above comments from the Von Mises Institute. But, they will full well engage in attacking the messenger and will do so with all manner of excuse why it is appropriate. But still, NOT ONE will address the issues involved.)

http://www.mises.org/fullarticle.asp?control=317&month=13&title=+Will+the+Bu bble+Pop?&id=16

-- Paul Milne

Clinton: "I did not have sex with that woman, Miss Lewinsky"

bks: "It was not overt lying. It was overgeneralization for rhetorical

-- Ed (ed@lizzardranch.com), January 09, 2000

Answers

Don't forget Elliot's 5th wave, Fibonacci's numbers, M.C. Escher's illusions. Spookeeey.

-- (barbarian@the.gate), January 09, 2000.

I'd say that this is some pretty massive backpeddling from the man whose last piece on y2k had 90% of the world's population dead just a couple of months after rollover.

Now he's a prophet because he can quote some lines from a textbook which basically says that economic bubbles burst? I'll tell you what all you Milne followers keep prepping and I'll keep making financial hay while the sun is shining, okay?

-- gee my 7-11's still there (what@a.twit), January 09, 2000.

twit,

I think making boatloads of money could be defined as preping. Yes stored food can go bad. Money can also go bad. You may get lucky and make all of the right decisions at the right time. Then again you might not. Well twit, do you feel lucky.

-- Ed (ed@lizzardranch.com), January 09, 2000.

It's NOT just the ecconomy stupid! Read "The Fourth Turning" for more.......

-- farmer (hillsidefarm@drbs.com), January 09, 2000.

Twit:

Has it occurred to you that your hugh pile of paper money won't be worth anything?

-- Y2kObserver (Y2kObserver@nowhere.com), January 09, 2000.

Twit.......Care to comment? It's evident you have nothing to offer ( snip... (Oh and notice very carefully, that NOT ONE of those who respond to my post will take issue with any of the above comments from the Von Mises Institute. But, they will full well engage in attacking the messenger and will do so with all manner of excuse why it is appropriate. But still, NOT ONE will address the issues involve

-- kevin (innxxs@yahoo.com), January 09, 2000.

snip......especially by the gloating polly-come-latlies. Yeah~ afraid to give any comment before the rollover,but they know all now. Fence sitting, hindsight "Big-Brains" that have big ideas,but not one original. Long time contributors to this forum know who they are, mere fish-

-- kevin (innxxs@yahoo.com), January 09, 2000.

"Y2K is the triger and the target is the economy, stupid" INNFOMAGIC.

-- John Littmann (LITTMANJ@AOL.COM), January 09, 2000.

Ah yes, the issues. Well, here are some of them:

1) Y2K hasn't been and won't be the trigger for anything. Discussions of economic cycles or questionable financial practices are a different topic.

2) Milne is trying to change the subject, desperately claiming he was talking about something other than what he actually said, the whole time. He hopes if he can distract the simpleminded, they'll somehow forget his 10,000+ y2k-specific predictions, ALL of which were wrong. And he's right, you can fool some of the people all of the time.

3) Unless the laws of economic gravity have been repealed, someday there will be a downturn. So what?

4) Milne predicted another Great Depression early in the 1990's and ran away from it (and for other reasons). He blew it then, he blew it on y2k, and he places no time limit on this next one. This is like predicting rain, but not saying when. Sooner or later it will rain, even in the Atacama Desert. So what?

-- Flint (flintc@mindspring.com), January 09, 2000.

Flint, are you aware that you are neurotically obsessed with Milne?

-- Reality Check (Wake@up.flint), January 09, 2000.

Reality Check:

Hey, we all need some comic relief, and Milne is one of the true practitioners of high camp. You gotta admit, someone who was so *definite*, and so abusive, and so totally wrong, and so utterly unable to admit it, qualifies as hilarious fool, and an object lesson for all of us. As High Priest of the Church of Paranoid Delusions, he deserves all of the mockery he's getting. I make no apologies.

-- Flint (flintc@mindspring.com), January 09, 2000.

In answer to shit-for-brains flint-boy

---------------------------------

Ah yes, the issues. Well, here are some of them: 1) Y2K hasn't been and won't be the trigger for anything. Discussions of economic cycles or questionable financial practices are a different topic.

(We are a MERE nine days into the rollover and flint-boy has declared it to be over before it has even started. Only a giant ass would extrapolate a lack of immediate failures to mean a BITR. But that is part and parcel of the Pollyanna credo. The economy has always been inextricably linked to everything that i have written about Y2K. For flint to assert otherwise is a lie or merely his own ignorance of my writing.)

2) Milne is trying to change the subject, desperately claiming he was talking about something other than what he actually said, the whole time. He hopes if he can distract the simpleminded, they'll somehow forget his 10,000+ y2k-specific predictions, ALL of which were wrong. And he's right, you can fool some of the people all of the time.

( As I said, the economy and economic context of Y2K is inexplicably intersperesed with all that I have written about Y2k. The subject is not only NOT changed but continued. )

3) Unless the laws of economic gravity have been repealed, someday there will be a downturn. So what?

( No, not a downturn, a mere downturn. Notice that this is consonant with flint's dyed-in-the-wool pollyann=ism. No depresssion, no recession...a 'downturn'. No Y2k effects...why...nothing at all.)

4) Milne predicted another Great Depression early in the 1990's and ran away from it (and for other reasons).

( Of course, flint is a liar once again. And of course, you may redeem yourself flint-boy and cite my post where I 'predicted' any such thing at all, or simply remain the liar that you are.

He blew it then, he blew it on y2k, and he places no time limit on this next one. This is like predicting rain, but not saying when. Sooner or later it will rain, even in the Atacama Desert. So what?

-- Flint (flintc@mindspring.com), January 09, 2000.

==================

flint-child is utterly obsessed with everything that I write. He can not contain himself. he must respond with some insidious nonsense or some new-found lie. flint-child...seek professional guidance. See if you can even go a week without responding to my posts. Then you will have a better understanding of your obsession with all things Milne.

And kindly notice that nowhere at all did flint-child even begin to address any of the issues that were brought forth.

Paul Milne

Clinton: "I did not have sex with that woman, Miss Lewinsky"

bks: "It was not overt lying. It was overgeneralization for rhetorical purposes."

-- Paul Milne (fedinfo@halifax.com), January 09, 2000.

"People are going to end up seriously dead over this one. The blackouts are NOT going to occur ONLY in East Cupcake or Pukeweasel, Michigan. They are going to be in NY City, LA, Chicago, Boston, Houston, Philadelphia, etc. Water will be out. Sewerage, out."

Yup, economic analysis. Idiot.

-- Flint (flintc@mindspring.com), January 09, 2000.

Flint, I don't think anyone can reasonably argue that this is not a bubble economy. The rest of the world thinks we are, they can see it. Why can't you?

Look at the valuations man! The numbers don't lie.

Or maybe they do. Maybe Y2K was all bullshit all along.

Things that look to good usually are.

Keep cheering for your favorite team, I mean stock.

-- Gordon (g_gecko_69@hotmail.com), January 09, 2000.

Gordon:

I absolutely agree this is a bubble. I don't understand it, it makes me nervous, I thought it would pop some time back. It will, sooner or later. OK?

The point I'm trying to make is that Milne was not doing economic analysis when he called anyone an asshole who didn't agree that they were child-killers if they didn't run away from the spiky haired mutants in the flaming cities. His incessant ranting had *nothing* to do with the possibilty that the economy might implode someday for what are now clearly non-y2k-related reasons. His pathetic attempt to redirect your attention away from what is probably one of the most abusive and hilariously WRONG viewpoints in usenet history is simple cowardice.

-- Flint (flintc@mindspring.com), January 09, 2000.

Flint--you're right on the money.

While the doomsday deferred (not denied) crowd rants about "media spin" and polly ad-hominem attacks, you need look no further for the apex and exemplar of un-reconstructed doomer revisionism. The main ideas:

1. I was talking about the failure of the American bubble economy, not Y2K in particular.

Right. A quick trip down memory lane will dispell that notion. You are quite right, Flint, to remind us of the Mad Max vision of 01/01/00 that was the keystone of doomer ideaology. And it's a fierce depression, indeed, that is better prepared for with TVP and ammunition, than with a bearish investment strategy and, if you must, gold. "There will be an economic crisis--someday." is an ironclad prediction...and as close to meaningless as any prediction can be. And it's completely beside the point of this discussion. Y2K the trigger? There is no evidence of any quality to suggest this. Doomers scouring the globe for failures being "spun" by the media can do no better than a few false alarms and temporary power outages.

2. It's not the rollover, stupid. The critical period has barely begun.

Sure. The rollover is only the tip of the ice. But two observations should be made:

First, that you can't hide the body of an iceberg under the tip of an ice cube. Rollover was so small an event that it failed to qualify even as a "bump in the road" scenario. If you told any doomer what would happen on 01/01/00 three months ago, he would have called you a pollyana idiot, a brainwashed fool, or worse. Yet, though reality has seemingly contradicted them, they refuse to reconsider their theories in the light of evidence.

Second, that the "critical period" is not only ten days old. As even most doomers would have told you two years ago, the critical period might have started on 1/1/99 (one-year lookahead) or 10/1/99 (federal government rolls into FY2000), or even 12/1/99 (one-month lookahead). Ten days into 2000? Hogwash! A great multitude of these back-office, big iron accounting systems have been in 2000 for _months_ now. They aren't going to start breaking in their tens of thousands if they haven't already.

3. Pollies are a bunch of ill-informed, mindless, brainwashed, incompetent, drooling idiots. They are assholes who should be censored and driven from the list. They were probably dropped on their heads for sport as children. And they keep making these vile, personal, ad hominem attacks to draw attention away from the facts.

Craig

-- Craig Kenneth Bryant (ckbryant@mindspring.com), January 09, 2000.

As far as I am concerned, Y2K has always been an economic event. Will it be serious enough to collapse the stock market bubble? We will know in a few monhts. By any objective measure (PE ratio, price/book, market cap/GDP, etc.), this is by far the greatest market bubble in US history. When it ultimately collapses, the risk of a depression is very high.

-- Dave (dannco@hotmail.com), January 10, 2000.