|CalculatedRisk- Krugman on the Economy||mannfm11|| |
NEW 2/9/2008 3:28:36 PM
I'mgoing to Calculated risk to read this one, but he is missing onebubble, the stock market bubbles around the world. I venture 50% of theearnings of corporations worldwide were derived from the excessivefinancing in the US. What Krugman is missing is that the 1990 bubble,whatever it was, took down Japan and Asia. If Japan faltered on thatone, I fully expect China and India to fall to pieces on this one, asJapan is already shaking in its shoes. I think the PE measured bycurrent stock prices in the US goes to 35 to 40 and I don't think themarket is going to buy a rising PE this time, but adjust to a fallingPE. The UNITED STATES is going to have to make adjustments this time,as the government can't become the economy in a private sector economy.Those working will quite often quit working and join those that areenjoying a free ride. It would be paradoxical if the Chinese came outof this as free enterprise people and the US came out of it as acommunistic socialistic country.