Credit Crunch

Folks,

As I mentioned, my interest right now is an academic view of what is happening
worldwide relating to economics...What I teach works, but if I understood the
world economics better would I be able to tweak my techniques further? I suspect
so...so consider this an advanced seminar..although I am happy to take questions
like "how do I find a trucker to move my goods off the docks?"
Any way, I am taking a free web based econ course at www.polyconomics.com..and I
am not sure I agree with the instructor...he seems to be generally right..but as
far as I can tell, his thesis is, since the govts control the currency, lets do
a good job controlling it by watching the price of gold, and manipulating credit
and interest rates. On the other hand, I tend to prefer the Austrian
economicists who ask "Why do we have govt involved in banking to begin with?"
Well, with success USA previous to 1913, and Hong Kong as well...I wonder why we
do too.... At any rate, I think the Austrians tougher questions lead to better
analysis...and their reading (if I have this right) is the govt stimulated the
economy with cheap credit...cheap credit financed some bad deals on the
margin...those bad deals got to say 30% of the total, and is now
correcting..first in Asia, then Rusia, S. America and we are next....
Why didnt cutting interest rates a fortnight ago fix everything as promised?
because the good deals are fully financed, and more money will just go to bad
deals..so banks are taking their extra money and buying govt securites..a safer
bet...So what does this mean for the small biz int'l trader...? stick to the
principles I provided...products that solve a specific problem..compete on
design not on price..sell to the upscale stores...and look to the sellers to be
interested in backing you as long as you prove there is a market.
I have noted in economic downturns the upper end stores weather better than the
mid market...any way..I am sure as we muddle thru current events there is a a
strategy here unique to these times...we'll find it...on another note, plese
feel free to use this list..write a note telling us how far you've gotten with
your biz..what problems encoountered..experiences.questions..problems..
John Spiers

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