http://en.wikipedia.org/wiki/Kondratiev_wave

and wondering to what extent we are seeing credit financing the creation of new waves of technology to give the upswing followed by periods of repayment of the debt (and hence monetary contraction in a deficit-based monetary system) from the revenues from the new generation of productive assets, on the downswing.

So cycles - bounded by the mathematics of compound interest on the money supply - would be intrinsic to our current - deficit-based - form of Capitalism.

"The future is already here -- it's just not very evenly distributed" William Gibson

In particular, experienced stock traders are surely aware of Ponzi modes in one way or other. Taking benefit from that must be a usual buisiness for them. Predicting moods of new market players is even an easier task than estimating "intrinsic" value of companies. (This is akin to the job of bookmakers: they do not really predict sport events; they just have to predict moods of participating betters. If they force bets to be distributed evenly, bookmakers win their daily bread with any outcome of the sport event.)

Bush and his wealthy backers are greed-crazed idiots.  They don't even know what they are doing.  It is like a drug binge, where even if you can remember that last time you ended in a dreadful crash, right now it feels just too good to be thinking about that.  

This scenerio is almost comforting.  

Scenerio II:  

Bush's backers have been running the US for the better part of a century, and not by being dumb, either--even if HE is.  They know they are running a bubble, and they already know when to cash out.  Will it destroy the system?  Sure.  But Peak Oil and climate change are on the verge of doing that anyway, so what's the problem?  The problem is what comes after.  Well, they are not talking about that, but they have certainly been THINKING  about that.  

They already have plans.  

This scenerio is less comforting.  

The Fates are kind.

Many citizens naive to the workings of a market economy put their entire savings into pyramid schemes. In a short while, $2 billion (80% of the country's GDP) had been moved into the hands of just a few pyramid scheme owners, causing severe economic troubles and civic unrest. Police stations and military bases were looted of millions of Kalashnikovs and other weapons. Anarchy prevailed,[4] and militia and even less-organized armed citizens controlled many cities.

Thus described by wikipedia.

I remember reading an in-depth article at the time. According to it (and my memory) it was not a strict pyramid scheme, but rather a bubble turned Ponzi. The bubble started from political changes in the area, that is the wars in what was soon to be former Yugoslavia and the sanctions put in place.

Albanian groups started to smuggle sanctioned stuff and made lots of money. Their was room for expansion and more and more people invested and got rich. The Dayton agreement of 1995 removed the foundation for the investment scheme but by then the speed was great enough that it could carry on until 1997 on pure momentum. But the day came when all savings had been sucked up and then the ineviteble collapse.

This was refered to as a pyramid scheme by western media and that got me thinking about the raising stocks at the time (1997) when everyone was becoming an investor and especially in technological stocks. So I figured that that must be a bubble too and predicted a crash in 1998. Apparently I underestimated how big bubbles can be.

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