Millions of Americans were “earning” money by sitting on or selling real estate because for a time it was far more profitable than using their God given talents. Those people will begin to contribute in other ways.

Billions of dollars were being thrown into bubbles and causing a classic “misallocation of resources,” again because investing in CDS’s or bubbly real estate was much more profitable and _perceived_ as less risky than investing in a small business or invention. If/when the Fed stops trying to reinflate those counterproductive asset bubbles, money will begin to flow to other parts of the economy where it can do some good and turn a profit.

The high cost of commercial and private real estate made it extremely difficult for American workers to compete with counterparts elsewhere. Imagine how competitive we could be if the price of a mortgage in San Jose were the same as that in Prague, Beijing or Mumbai.

The Japan carry trade and China’s debt/currency intervention has made electronic products from other parts of the world so unbelievably cheap that not only is it very difficult for Americans to compete in this space, it is also inefficient to repair something that can be rebuilt for the equivalent of a few seconds of your labor by someone who lives on a different currency scale. If current trends continue, cars might eventually also be treated as disposable. Houses might be constructed in China and shipped across the pacific (using amazing amounts of oil but still beating the cost of construction labor when paid in U.S. dollars) This is ecologically inefficient and would be economically inefficient if there weren’t so much intervention in the real economy.

NASDAQ has spend years below its multi-generational mean trendline but somehow I don’t think we’ve reached the end of what technology or the internet can provide.