Dynamite Economy - Post Industrialization Renaissance

Do not expect the Fed, the Govt can do anything to save this tragedy. But they can certainly make it worse.

The theory of supply and demand failed here.
Threfore to solve this problem, we need deeper understanding, higher wisdom.

Why?
The core is not about money too little.
It is about over abundance wealth (OAW)created by Electronics industries found no place to invest.

The Finance industries created papers to absorb this.
And there is no basis for the price, the values of equities, all are exageration of values.
This is purchases without actual demand, therefore prices is detached from values.
The supply and demand theorgy is fundamentally inadequate, unless it takes into account over abundance supply of funds.
This therefore cannot sustain.

Not just the naiive investor are hurt, the finance industries are hurt, many nations leaders are.
But real estates are not factor of production, so the impact is contained.

But since the Fed, Sovereign Funds injected well governed huge funds into free private hands in supporting this, where will the money go?

Since the valuation was well above real value? Will bank make good their housing loans?
Would they pump good money into something worth much less?
or
Seek greater window for bigger profit in order to cover the lost?

As stated in "Dynamite Economy" as early as Aug, 2007,
including to Steve Forbes on Sep 9, 2007:
these big sum of wealth will move to skyrocket commodities (including energy price).
These are factor of production, key factor of productions.

Once these key factor of productions skyrocketed, the whole economy is impacted, badly impacted. No one can survive.

Look at Fortune 10, almost all are energy giants at double digit profit margin.
How many firms need to make money to sustain their profit, when the rest, except tobaccos are making almost zero profit?

i do not think energy giant, if they are wise, would be comfortable at this state.
They know not only the profit cannot last, they will be not be able to collect the sales, when all biz go bust. Worse, their refineries will be hurt.

So the solution is to create new economy, bigger than electronics, to create employement, to create real wealth.

First,
as my advice to the Republicans, to tear down brigdes, roads, infrastructure and rebuild them. Not only top consultants get jobs, laborors, mon and pop shops also got jobs. This must be done even by Bush, Bush should not wait till his term is over.

Second,
Now, auto, aero, electric, electronics, IT are matured. No new industries, significant industries likely to come.

We are in post industrialization society. just like Renaissance after Agrarian society, aristocrats invest in extravagance mansions, churches, and use little material, but a lot of artisans, to decorate every corners, including the ceilings.
This is effective, and self satifying for the extremely rich, not just their egos, but also their welcome by all.

Solvere Lim Swee Keng on New York Times
www.cts-ideas.comgoogle "Dynamite Economy", "Energy Solvere"