power and dreams

Dennis R Redmond dredmond at OREGON.UOREGON.EDU
Tue Dec 1 15:14:25 PST 1998

On Mon, 30 Nov 1998, gilbert wrote:

> situations? it seems to me that the american obsession with the stock
> market and carrying huge amounts of debt are setting us up for a even
> larger crisis. can the situation be resolved in some other manner?

Well, the thing is that the US is no longer master of its own financial destiny. We're $2 trillion in hock to the EU and East Asia, and capital inflows from the latter have actually accelerated as the 1990s have progressed. So if there's gonna be a bailout, Japan and the EU will have to lead the way, by cutting interest rates still further (in the EU), buying up US firms on the cheap (a la Daimler and Deutsche Bank), and generally facilitating an even bigger credit expansion. Weird as it sounds, only more debt can cure the ills of overindebtedness.

-- Dennis

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