I think we are at this point again, but this time it will be...

I think we are at this point again, but this time it will be harder. Companies are "fixing" their balance sheets. ie selling assets to get rid of debt. It could be a firesale, especially for commercial property and then for residential. First movers may have the advantage.

No Debt, No Money
Published: October 28, 1991
To the Editor:

"Money Supply Doesn't Tell All" (Economic Scene, Oct. 9) breathes new life into a favorite cliche of financial writers, a cliche that should have been given a decent burial long ago.

The article says: "No one can ever be sure that stagnant money growth is not a portent of an economic downturn. But simply assuming that it is -- and putting pressure on the Fed to crank up the printing presses -- carries its own risks."

The Fed cannot crank up the printing presses. Our money is debt-based. To create new money requires new debt. All the Fed can do is create new reserves that permit the creation of new debt. But if you do not have borrowers seeking credit you are not going to have new debt. That is the Bush Administration's problem, not any so-called "credit crunch." We have a dearth of borrowers. The consumer is tapped out and can't take on any more debt. So too is the Government. JOHN V. COLLINS Bay Shore, L.I., Oct. 9, 1991