My Apologies

Sorry if this has turned into an amateur-economist blog. I just feel like – sifting through the web looking for answers – sharing the goodies every time I find something good. I’ve been learning more economics the past 2 weeks than in years. Unfortunately much of that is about how economics should NOT work.

I’ve often thought that people pay too much attention to Wall Street. After all, you can have a great BOOM on the Street without an economic collapse all over the country, right ? Confidence in the stock market is one economic indicator. But Wall Street alone is not THE economy. People keep talking about Wall Street versus Main Street.

This time around, though, I wonder whether the real BOOM on Main Street is still ahead of us. That losing confidence has everything to do with spotting the tip of the iceberg. Somewhere, I heard it compared to another type of maritime hazard – a distant earthquake that has happened and now everyone is waiting for the tsunami that’s racing our way.

All we’ve been seeing are the symptoms of a self-absorbed economy that is all about pushing money and derivatives thereof around the table and not producing anything, a terminal illness that can’t be cured with more magic pills. This here was the best (most dramatic) way I’ve seen it put:

Is this the beginning of the end for the dollar and the Treasury market? Is this the first sign of the bursting of the bubble in Treasury securities? That market, in a sense, represents the ultimate bubble as it exists at the whim and caprice of foreign investors, who have as participants in a Faustian bargain, financed our war(s) and our lifestyle so generously over the last decade. Maybe even that bizarre construct is crashing about us as we speak.



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