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The other brilliant Smith, not Adam Smith, but Vernon Smith, is optimistic that the gains from trade will prevail over government stupidity in the coming years.
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Posted by Peter Boettke on May 23, 2007 at 09:45 AM | Permalink
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"The bull cadre credits the Federal Reserve's interest-rate policy with sustaining the market advance by engineering an economic "soft landing" -- slowing growth to a manageable pace while staving off recession. When stocks began to slide in May of last year and again in February, experienced investors were surprised by the speed of their recovery, as the combination of low world-wide interest rates, tame inflation and strong profits offset the stock weakness."
Haha funny joke! Engineer?!?! A soft landing???
I hope Dr. Smith is correct, luckily I have a long investment time horizon even if he isn't. The difference between this growth is the fact that the boom isn't based on an interest rate driven boom like the late 90s. Much of the problem could take place in the international market. I also question the reason for a possible bust regarding the value of the dollar. Hasn't the value of the dollar dropped because of the increase in the price of gas imports? Also, if the dollar is decreasing doesn't that mean that American goods are cheaper on the international market, which could help explain the current growth. Will we see a bust once the dollar value increases?
Matt C. |
May 23, 2007 at 02:33 PM
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