[OPE-L:117] [OPE-L:353] Re: Re: BK's and the Asian Crisis

michael@ecst.csuchico.edu
Mon, 23 Nov 1998 21:04:02 -0800 (PST)

I think that John is making the common sense of Fred's note too complex.

I guess that I have been pushing the idea of slaughtering capital values
for some time. The idea seems rather simple, yet complex.

For me, capital values evolve in time. Historical values soon become
irrelevant. Slaughtering capital values means that the basis of
valuation falls, raising the calculation of profit rates. If I buy a
bankrupt company for half of its previous value, I might be able to earn a
decent profit.

The complexity comes from the difficulty of getting from here to there.
The paroxysism of a deflation unsettle all existing relationships and can
destabilize society.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@ecst.csuchico.edu