Brother, can you spare a dime?(by mannfm11)

The deflationary environment develops when the cover comes off what isreally there, which is actually a void between actual money and credit.Not to get into a wild argument about what is money, lets say it isnothing more than the modus operandi of exchange. The question here ishow much of it can be delivered that actually belongs to someone. Onthe lending side, the value of collateral threatens to implode as it isreversing the effect that credit had on it in the first place. Thus,the credit created the collateral value and now the collateral valuehas created more credit which cannot be sustained by the income to bederived out of the collateral. The stock market is being supported, notby profits as preached, but by liquidation of capital. Not by growth,but by investment in the stock of the very companies on the market.This pulling ones self up by his own bootstraps is an illusion. Becauseinvestment in ones own stock is no real investment at all, how canthere be any growth in this action. We have gone from the mortgagecreating the value for the home to the home creating the mortgage to aquestion of either being worth what is on the face for the very reasonthat the debt service against the home is greater than the amount thatcan be paid by the population as a whole. The same principal holds trueof every other asset. How can the SPX with its dividend yield of lessthan 2% stand in a capital world where the risk free yields are 5% andthe AAA yields are higher than that? Buy and hold and finance elsewherebecomes a strangle.

And Yogi, as far as arrogant goes, I don'tknow about you and Jesse. My point in this case is that anyone whothinks they are going to be moving up in luxury in this game if it goesdown as I suppose it will is in for a rude awakening. There was a songin the depression, Mr can you spare a dime. I am sure it was quite truethat guys that owned railroads were begging dimes. My suspicion is thatthose that are holding cash are going to get burned, but at the sametime, I suspect that picking a bottom here is going to becomeirresistable and trillions are going into the dumps and probably out ofcirculation because the prices are going to keep falling. The problemthis time around is the bottom dollar cannot be identified as it couldwhen the bottom dollar was gold. Bank credit eats itself regardless ofits end form.