Julio: > If FIRE (the level) is large relative to GDP (and it must be around > 20%), deflating FIRE deflates the whole economy.
What are you talking about Julio? Now, this is information comes from "Bad Money" by Kevin Phillips, 2008, and he claims that his information comes from Federal Reserve Flow of Funds Accounts of the US. If this guy is not a liar, the domestic financial debt as percentage of the US GDP in 2006 was 107%. Does this "domestic financial sector" not what FIRE mean? And, it is highly likely that in that he is not even counting the debt associated with such derivatives as CBOs, CLOs, ABSs, Whole Loan CMOs (the father, or mother, of CDOs), CDSs and the like in that alphabet soup of things, who knows? Maybe he does, maybe he does not! But bet that not all of them are included. Here is a more academic article from someone I like and respect, although most likely I differ from him politically: http://www.stanford.edu/~duffie/BIS.pdf You see, political differences are not a reason to not like a person, unless that person is a child molester or Palin or some such thing. Best, Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
