William Rhodes, chief equity strategist for Williams Capital was quoted as saying: "People are asking themselves whether this is the end of the sell-off."
The present bout of selling is probably just an anticipation.But it is a serious warning that the boom is reaching its limits.The International Herald Tribune
(19/10/2000) quoted the worries of one American investment analyst: " 'It seems like what we've got going is largely a financial-market event,' said Stephen Slifer. chief US economist at Lehman Brothers. 'The concern has to be: To what extent does that spill over and become an economic event?'
"One worry, Mr. Slifer said.Is that the recent tightening of liquidity in the corporate bond market could slow the pace of high-tech investment by companies.
they get their money back?Ericsson
, another important company in this field, is now struggling to keep its share in the crowded handset market, with a barely one percent profit margin.
Actually, it is not a bit of use arguing that there is a lot of new technology coming on stream: flat television sets, digital TV and mobile phones with Internet etc.Yes, all manner of wonderful inventions are, of course, possible.But we must not forget what Henry Ford said: "I am in business to make money, not cars."We know that all this technology exists.
the Fed ignore these pressures and simply cut interest rates to stimulate demand during a slump, as the text-books require?It would be a bold person who would bet money on such an outcome!The bankers' natural instincts would be rather to allow output to fall to what they regard as a "sustainable level".If, in order to combat the demon of inflation and restore the dollar to its former glory, it is necessary to endure the pain of unemployment (pain for the working class, that is, not for them!) then so be it!Such a position is quite logical from a capitalist point of view, and if it leads the world into a deep slump, then that is just too bad.Such a scenario is, in spite of everything, entirely possible.
But, as predicted by the Marxists
there be a Slump?"