The Crash of the Millennium: Surviving the Coming Inflationary Depression - Hardcover

Batra, Raveendra N.; Batra, Ravi

 
9780609605127: The Crash of the Millennium: Surviving the Coming Inflationary Depression
Hardcover
ISBN 10: 0609605127 ISBN 13: 9780609605127
Verlag: Harmony Books, 1999

Inhaltsangabe

The author sounds a warning about the coming economic disaster confronting America and offers personal financial strategies to help individuals cope with the turmoil

Die Inhaltsangabe kann sich auf eine andere Ausgabe dieses Titels beziehen.

Über die Autorin bzw. den Autor

DR. RAVI BATRA, professor of economics at Southern Methodist University in Dallas, is the author of five international best-sellers. Chairman of the department from 1977 to 1980, Batra was ranked third among forty-six "superstars" selected from all-American universities by the learned journal Economic Inquiry. In 1990, the Italian prime minister awarded him a Medal of the Senate for correctly predicting the downfall of Soviet communism.

Aus dem Klappentext

ble how often the predictions of economics professor Ravi Batra have proven prescient. Years in advance he predicted the rise of fundamentalism in Iran, the fall of the Berlin Wall, the decline of communism, the stock market crash of 1987, and the September market slump of 1998. The one time Batra seemed to get it wrong was with the prediction of his best-selling book, The Great Depression of 1990. As it turned out, that depression was postponed by massive borrowing from abroad, and what we now face will be all the worse for the delay.<br> <br>The premise of this book is as simple--and as powerful--as the law of supply and demand. In the United States, as in many other countries, we've been producing more and more goods, but wages have not kept pace. That disparity has been papered over by credit cards, easy loans and a huge speculative bubble in the stock market, but cracks are appearing in the walls. Russia, the "Tiger" economies of Asia

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

INTRODUCTION: A TORNADO ON THE HORIZON

January is normally a placid month of the year in the southern part of the United States. The average temperature is just right, a balmy 64 degrees F. City parks are filled at the weekend with revelers, screaming children, and their doting parents. But January 1999 turned out to be deadly, the single worst month on record for tornado disasters. The month was barely half over when more than a hundred twisters ripped across the quiet plains of Texas, Oklahoma, Louisiana, Tennessee, Florida, Georgia, Mississippi, and Alabama, killing scores of people, uprooting trees and power lines, and anything else that had the gall to be in the way. Business and property damage climbed into the billions.
Was nature's fury a premonition or just a passing wave? I believe there are much bigger tornadoes on the horizon, not of the weather but of financial mayhem. They are not the twisters of wind, water, and lightning but of share price crashes, inflation, and job losses. They are out there if anyone has the binoculars to see them, and they are fast headed our way. From my calculations, they will be here by the fall of 1999, at the latest by the millennium.

Ever since the early 1980s, stock prices, with temporary hitches, have been sizzling in the United States, building the biggest speculative bubble in history. Some people call it the market of the millennium; others compare it with eating your cake and having it too. Whatever you call it, the bubble is about to burst. Millions of Americans, including some journalists and computer experts, are worried about the perils of the so-called millennium bug; I submit we have more to worry from the millennium bubble, whose explosion would be heard around the world, even where computers have yet to make a dent. The market of the millennium is about to slip into the crash of the millennium, possibly a few months before the Y2K bug gets a chance to contribute to the damage. Here is why.

Free enterprise functions smoothly only if the twin forces of demand and supply operate without constraints; this means that high competition prevails among firms so that wages rise in sync with productivity. Wages are the main source of demand, and labor productivity the main source of supply. If salaries lag behind productivity, as they have all over the planet due to the prominence of monopolies, the supply-demand balance can be maintained only through artificial means; eventually, artificial props give in, and demand falls short of supply, leading to production cutbacks, layoffs, and a recession. As wages trail productivity, profits and hence share markets jump. When the demand gap comes to the surface, stock prices drop, business and consumer confidence wanes, and a recession becomes inevitable.
At this point, nations may resort to deficit budgets, monetary expansion, or foreign loans, and the problem may be postponed without instituting fundamental reforms that free the supply side from the constraints of monopoly capitalism. Eventually, bigger trouble follows, because share markets go into a frenzy, only to plummet when the demand gap returns with a vengeance. If a country has borrowed freely from abroad, its currency crashes, and both inflation and layoffs follow.

The long-term cure lies in restoring the balance between supply and demand rather than in short-term palliatives that create debt, strengthen the supply side, and relatively weaken demand. One proper policy, for instance, is to encourage high competition among industries and discourage mergers between large and solvent companies. But the whole world has been doing just the opposite at least since 1990, and now an economic disaster of an inflationary depression is simply inevitable.

Is there a way out? Not in the short term. But if we follow plain sense and introduce fundamental economic reforms to build a truly free enterprise system, then the crisis could be limited to just three years. However, if we resort to the usual artifacts of creating more government debt, monetary expansion, or both, then I am afraid the coming calamity could outlast the new decade, and we still would have to change our course eventually. This is my worst nightmare and is the more likely of the two scenarios. In other words, we have to prepare for the worst, and I can offer you some simple and commonsense advice about protecting your assets in case the horror becomes a reality.

THEME OF THE BOOK
Thus the moral running through my work is plain and simple. When a country postpones its economic ills through massive borrowing from abroad, at first share markets and the economy roar, but then a bigger calamity of an inflationary depression follows.
I have written a number of books forecasting the future of the world economy and society; some forecasts have been optimistic, some pessimistic, although most associate me with Cassandra-like predictions. I am also the one suggesting that, following our manifold catastrophes, the world will witness its first golden age. For the 1980s, too, my predictions were overly optimistic to many, as I wrote that oil prices, inflation, and interest rates would sharply fall, even as share prices skyrocket, culminating in a great depression in 1990. Fortunately, the United States and the rest of the world only had a recession that year, but, unfortunately, they prevented a depression not through fundamental economic reforms but through mammoth inflows of foreign capital, especially from Japan.

That misguided policy is about to produce bleaker results. I have usually maintained that the coming depression would be deflationary or accompanied with price stability. However, now I believe that, for the first time in history, the U.S. depression will be inflationary, at least at the start. The reason is that under crony or monopoly capitalism that today reigns the world, including the United States, when a country postpones its ills through massive loans from other countries there is first a giant speculative bubble; then the bubble bursts, the currency collapses, and a lethal combination of inflation and depression erupts. The evidence for this hypothesis comes from recent crises enveloping the Asian Tigers, Mexico, Russia, and Latin America. All these regions borrowed huge sums from abroad in the late eighties and the nineties to finance their prosperity and trade deficits. For a while they enjoyed lofty growth or a stock market binge or both, only to see their currencies plummet since July 1997, when the Thai baht collapsed.

„Über diesen Titel“ kann sich auf eine andere Ausgabe dieses Titels beziehen.

Verlag
Harmony Books
Erscheinungsdatum
1999
Sprache
Englisch
ISBN 10 
0609605127
ISBN 13 
9780609605127
Einband
Gebundene Ausgabe
Auflage
1
Anzahl der Seiten
276
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
Nicht verfügbar