An Impending What?

Money flows to where it earns the most with the least risk determined as follows.

Money Flow = {Earnings X Risk} X [ {Individual Risk Tolerance} X {Individual Earnings Desire} ]

The "New Economy" is actually technology simplified and made available by the Top 1% for the hordes of workers to use.

So called "New Economy" companies are actually only support operating departments of traditional companies that produce products and services.

Over-blown markets will deflate too fast as investors fear the "New Unknown"

And Now:

The world has ventured deep enough into the new millenium that it is beyond trite to refer to our day as a part of the new millenium. Thank God that's past. The reality is that human psychology now demands an adjustment from the 'future' to the reality of the present.

The stock market that became a national pastime is past but that will not be perceived by the majority of people until it is too late. The bond market has become a more important source of new capital for good, less good and unworthy businesses over the last five years. Slowly over the last two years rates have been increasing because the quantity of capital has decreased and the risk premium demanded has increased.

The easy money (credit and venture capital) crest has been over-reached. Higher rates no longer satisfy potential lenders once they perceive a climate of defaults. A promise to pay 22% is scoffed at when the the lender realizes that in a climate of default the rate may be 0.0% !

The global economy has been driven by Capitalism Contagion. But the massive spread of capitalism which was let loose following the official fall of Soviet Union-style socialism was caused by the explosion in the practical application of technology. By the mid-1990's technology was no longer the domain of the Top 1% who were smart enough to understand, implement and utilize it. Great economies of production were realized beyond the textbook economies of scale.

Again: The simplification of technology by the Top 1% provided for the hordes of workers' use of technology.

Possibly March of 2000 will be noted in the history books as the point when markets realized something was rotten in the state of cyberspace.

The dichotomy --- or War promulgated by the media --- between "New Economy" and old economy companies started to breakdown. Soon most people will realize that the "New Economy" is actually technology simplified and made available for the hordes of workers to use on their jobs in (old) economy companies.

But It's Too Late:

Excesses continued too long. Natural laws of economics have been forestalled too long behind a dam of misunderstanding built and jury-rigged daily by the financial media and accepted by an under educated populace of pseudo-economists each fancying himself as being a participant in the "New Economy" with complete understanding of vast new frontiers.

Those vast new frontiers are starting to be perceived as the same old new frontiers that are ushered forth periodically by leaps in technology. Gutenburg's printing press, McCormick's reaper, Marconi's radio, Ford's automobile, Einstein's atomic theory each set stages for leaps forward. But those leaps do not materialize instantly upon each of these geniuses' whispering of their products. Time must pass for assimilation first by the Top 1% and then by the hordes of workers able to utilize the simplified new technologies.

But it is too late. Capital markets now perceive the "New Economy" as the same old New Technology Game. Sure it's great and will be even better, but not because economic laws have been rewritten or human psychology has changed. And accordingly the human psychology that over pumped the "New Economy" will deflate it with abandon, impunity and total disregard for the feelings and needs of individuals. Individuals and businesses will be swept away in the usual torrent of too many exiting at the same time through a narrow passageway.

The Next Bottom Line:

Money flows to where it earns the most with the least risk determined as follows.

Money Flow = {Earnings X Risk} X [ {Individual Risk Tolerance} X {Individual Earnings Desire} ]

Bond and stocks markets will recede. Euphoria-based technology 'companies' based upon the axiom, "It can be done technologically, therefore we will do it", will be forced to see that there is no practical need for the "products" they attempted to deliver over the Internet. Good companies that over-extended debt to blindly keep pace with an invalid technology will declare financial bankruptcy, thereby implicitly admitting to having been intellectually bankrupt in the first place.

But new opportunities will be available to those wise enough --- and still wealthy enough --- to invest in them.

**Do You Remember Those Other "New Economy" Opportunites?**
	March 3, 1928	September 3, 1929	November 13, 1929
Radio Corporation of America	94-1/2	505	28
Montgomery Ward	132-3/4	466-1/2	49-1/4
And then they went lower during the Great Depression years. But fear not: If the 1929 buyers were still alive in the 1960s, they could have sold and broke even.