The Economy

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Top MemberPermalink Reply by Terry H on August 15, 2009 at 5:58pm

This is an excellent analysis. I have been following the economists (eg: Prof. Steve Keen http://www.debtdeflation.com/blogs/) and money managers/theorists (David Tice, www.prudentbear.com and Robert Prechter of Elliot Wave fame, http://www.elliottwave.com), and they all come at this with essentially the same analysis and prediction of a further market collapse and subsequent real depression.

I read John Kenneth Galbraith's book on the 1929 stock market crash, and I understood his saying at the end that the jury is still out on Keynes' idea of solving a lack of demand with massive government spending. The depression finally ended with US entry into WWII, which did provide massive government spending but also provided "jobs" for all the men drafted into the war while women filled their jobs.

I am also reading "Lords of Finance," which describes how the central bankers of Great Britain, Germany, France, and the US handled their respective economic situations before and after WWI, and how the US was in a stronger position because it did not enter WWI until the very end. Instead, the US supplied Europe with the arms to fight and made a fortune. Very interesting.

As traders, I think we should be ready to take the short side but not jump in too soon.

Top MemberPermalink Reply by Terry H on September 19, 2010 at 11:10pm

For those of you interested in the economics behind the current and future markets, here is Prof. Steve Keen's latest blog discussing where we are right now in terms of debt to GDP ratio, deleveraging, the financial sector and the implications for growth: http://www.debtdeflation.com/blogs/