Thommo
03-06-2004, 10:21 PM
Bubble Fatigue.
The latest money supply figures show yet another bubble
expanding; M3 is increasing at a breathtaking 20% annual
rate. In the last 4 weeks, M3 has gone up $155 billion. If
this were to keep up, the nation's total money supply would
rise by $2 trillion in a year's time - an amount equal,
roughly, to a fifth of national output.
But how long can it continue?
You will recall, dear reader, that Alan Greenspan has made
a pact with the devil... and George W. Bush has made a pact
with Alan Greenspan. They will both do all they can to keep
the bubble expanding - at least until after the election.
And now, with the war in Iraq going about as well as you
might have expected, the economy has become more important
than ever. If by ballot day, things seem to be going badly
on both bubble fronts, things will also go badly for
America's bubble president on Election Day.
But we are getting a little tired of bubbles. They seem to
expand... and expand... and expand some more. Every time we
expect them to deflate, they merely get bigger.
"You won't believe what is happening to real estate - even
here in Baltimore," said a friend yesterday. "In your old
neighborhood, they sold a house recently for over $300,000.
It's unbelievable."
Unbelievable it is. A few years ago, they couldn't even
give houses away in many parts of Baltimore. Seriously. The
mayor tried it. He condemned hundreds of abandoned houses
and tried to give them away for $1 each. Many of them found
no takers.
################
I bring this exerpt from "The Daily Reckoning" to your attention merely as a sobering thought. Beyond it's most basic value, RE's value is totally "What someone will pay for it" and therefore of no more intrinsic value than a painting on the wall! "God" has stopped painting old masters too. And possibly more critically, stopped putting more oil in the ground.
Just the thought for the night! ..... T
The latest money supply figures show yet another bubble
expanding; M3 is increasing at a breathtaking 20% annual
rate. In the last 4 weeks, M3 has gone up $155 billion. If
this were to keep up, the nation's total money supply would
rise by $2 trillion in a year's time - an amount equal,
roughly, to a fifth of national output.
But how long can it continue?
You will recall, dear reader, that Alan Greenspan has made
a pact with the devil... and George W. Bush has made a pact
with Alan Greenspan. They will both do all they can to keep
the bubble expanding - at least until after the election.
And now, with the war in Iraq going about as well as you
might have expected, the economy has become more important
than ever. If by ballot day, things seem to be going badly
on both bubble fronts, things will also go badly for
America's bubble president on Election Day.
But we are getting a little tired of bubbles. They seem to
expand... and expand... and expand some more. Every time we
expect them to deflate, they merely get bigger.
"You won't believe what is happening to real estate - even
here in Baltimore," said a friend yesterday. "In your old
neighborhood, they sold a house recently for over $300,000.
It's unbelievable."
Unbelievable it is. A few years ago, they couldn't even
give houses away in many parts of Baltimore. Seriously. The
mayor tried it. He condemned hundreds of abandoned houses
and tried to give them away for $1 each. Many of them found
no takers.
################
I bring this exerpt from "The Daily Reckoning" to your attention merely as a sobering thought. Beyond it's most basic value, RE's value is totally "What someone will pay for it" and therefore of no more intrinsic value than a painting on the wall! "God" has stopped painting old masters too. And possibly more critically, stopped putting more oil in the ground.
Just the thought for the night! ..... T