Mike, On 1/14/09, Mike Tintner <[email protected]> wrote: > > "You have talked about past recessions being real opportunities for > business. But in past recessions, wasn't business able to get lending? And > doesn't the tightness of the credit market today inhibit some opportunities?
It definitely changes things. This could all change in a heartbeat. Suppose for a moment that Saudi Arabia decided to secure its Riyal (their dollar) with a liter of oil. The Trillions now sitting in Federal Reserve accounts without interest and at risk of the dollar collapsing, could simply be transferred into Riyals instead and be secure. Of course, this would instantly bankrupt the U.S. government and many of those Trillions would be lost, but it WOULD instantly restore whatever survived of the worldwide monetary system. Typically not. Most new innovations are started without access to credit in > good times or bad. Only because business can't recognize a good thing when they see it, e.g. Zerox not seeing the value of their early version of Windows. Microsoft (MSFT) was started without any access to credit. Unless you count the millions that his parents had to help him over the rough spots. It's only in crazy times that people lend money to people who are > experimenting with innovations. In ordinary times, they want stock instead, with its MUCH greater upside potential. Most of the great businesses today were started with neither a lot of > venture capital nor with any bank lending until five or six years after they > were [up and running]." This really gets down to what "up and running" is. For HP, they were making light bulb stabilized audio oscillators in their garage. Because of numerous possibilities like a secured Riyal mentioned above, I suspect that things will instantly change one way or another as quickly as they came down from Credit Default Swaps, a completely hidden boondoggle until it "went off". Note how Zaire solved their monetary problems years ago. They closed their borders over the Christmas holidays and exchanged new dollars for old. Then they re-opened their borders, leaving the worthless old dollars held by foreigners.as someone ELSE's problem. Mexico went through a sudden 1000:1 devaluation to solve their problems. In one stroke this wiped out their foreign debt. Expect something REALLY dramatic in the relatively near future. I suspect that our bribe-o-cratic form of government will prohibit our taking preemptive action, and thereby leave us at the (nonexistent) mercy of other powers that aren't so inhibited. I have NEVER seen a desperate action based on a simple lack of alternatives, like the various proposed stimulus plans, ever work. "Never expect a problem to be solved by the same mindset that created it" (Einstein). The lack of investment money will soon be seen as the least of our problems. On a side note, There hasn't been $20 spent on real genuine industrial research in the last decade. This means that you can own the field of your choice by simply investing a low level of research effort, and waiting for things to change. I have selected 3 narrow disjoint areas and now appear to be a/the leader in each. I am just waiting for "the world" to recognize that it desperately needs one of them. Any thoughts? Steve Richfield ------------------------------------------- agi Archives: https://www.listbox.com/member/archive/303/=now RSS Feed: https://www.listbox.com/member/archive/rss/303/ Modify Your Subscription: https://www.listbox.com/member/?member_id=8660244&id_secret=126863270-d7b0b0 Powered by Listbox: http://www.listbox.com
