Hi Steve,



"The more unsound the policy the greater the market opportunity." -- Steve Hurst



I think it's fair to say that there is always a certain amount of 'creative destruction' going on in the economy at any given time.



And sometimes, there is a good deal more creative destruction going on, than at other times.



So far, so good.



But there comes a point at which too much 'creative destruction' becomes a detriment to the overall economy, to investment firms and individual investors, and to the government and the public interest.



We saw this in the stock market crash of 1929, in subsequent recessions, during a period of stagflation, and during the subprime mortgage crisis of 2008 -- and all of those events could accurately be described as 'creative destruction' events, or as some might say, 'investor opportunities'.



The 'too much creative destruction' I'm talking about is the threshold that is beyond the capacity of relatively small numbers of investors to fully buy-up every investor opportunity that becomes available during a crash.



I've heard it said that the subprime mortgage crisis resulted in a $4.5 trillion market correction (I haven't researched that number to find out if it's 100% accurate, but let's just pretend that it is, for now)



Apparently, there weren't enough investors to buy up all those 'opportunities' -- $4.5 trillion worth.



Similar could be said about the 1929 stock market crash, although not in the $4.5 trillion range.



If enough investors would have had deep-enough pockets, then the 1929 stock market crash would have only been a minor blip in American economic history, because any depreciated stocks would've been almost instantly snapped-up by investors.



But they weren't. And during large market corrections, they never will be 100% snapped-up because there just isn't that much pent-up demand.



Which results in the government being forced to bail out large numbers of citizens via social welfare schemes, and to bail out relatively large numbers of investment houses/banks, corporations and other entities -- via stimulus/obscene debt loads -- which will never be repaid in a million years.



But someone (everyone) is paying the interest on that government debt, forever. Which to my mind induces a kind of drag on the economy, for that is billions of dollars that could be better spent in the economy. Year in and year out.



Without that money available to the market, to investors, and to the public, it means that we have been, and still are, missing opportunities as big as the sky.



Resulting in lower aggregate demand (indefinitely) than would otherwise be the case.



I'm saying that the normal ups and downs of the market are indeed, opportunities for investors -- but also that large spikes (although they can definitely be classed as 'investor opportunities'!) wreak far more harm to the long-term economy than is acceptable, and that large spikes puts the brakes on a growing economy, and for slow-growing or stagnant economies, it is at that point that their economic death spiral commences.



I hope you don't mind the long reply.



As always, best regards! JBS





