The Dow itself is likely to crash soon after January 20th. The premise of my new book is as simple and powerful as the law of supply and demand. Wages are the main source of demand and productivity the main source of supply. When wages lag behind productivity for any reason, demand trails supply, so that debt must be created to maintain a balance between production and consumption. A day comes when the debt is so large that it cannot rise any more; then demand trails supply, and the over-inflated financial markets crash one by one. Hence economic policy should aim at preserving a balance between real wages and productivity. (This is one of the basic premises of Marxist analysis of capitalism. The other premise, that capitalism would collapse from within has yet to be shown, quite the opposite, socialism collapsed from within - AM) When the speculative bubble bursts, the country faces a deflationary recession or depression if its trade is in balance or surplus. But if it has a trade deficit, then its currency collapses and the end result is an inflationary recession or depression. With the trade deficit mushrooming in the United States for more than two decades, I foresee a collapse of the dollar and an inflationary depression in America unfolding in the next two years. The Crash of the Millennium describes how individuals, businesses, and governments can prepare for the hardships that lie ahead. But the long term future of the world is very bright, for we are now evolving toward the first global golden age. .
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