The modern 1930s are the logical consequence of the “New Economy” of the past decade, just as the original was a logical consequence of the “Roaring Twenties.” In each case, technology and leverage combined to create a potent but ultimately poisonous brew of wildly inflated asset prices. In essence, greedy CEOs (and investment managers) said, “we brought you the new economy, please cash us out now.”
March 27th, 2008 | Tom Au | 6 comments | ContinuedArchive for Tom Au
What is Inflation: Five Types of Inflation Defined
Over on RealMoney, Barry Ritholtz argues that the U.S. government is probably underestimating inflation because it is focusing on the wrong type of inflation. I would agree with that, having identified no less than five different types of inflation: commodity inflation, wage inflation, monetary inflation, fiscal inflation, and foreign exchange inflation. Before discussing “inflation,” it helps [...]
June 15th, 2007 | Tom Au | 2 comments | Continued
Collapse of U.S. Housing Bubble Will Balance Income & Consumption
Richard Suttmeier on Real Money hit the nail on the head when he said yesterday that the real estate explosion is about to implode. Like him, I believe that the subprime collapse is not just a speed bump in the “New Economy.” Instead, it is a sign of wider problems in mortgage lending that threaten [...]
April 26th, 2007 | Tom Au | 6 comments | Continued