Which brings up the question: Grow to what? The economy is still growing, just growing at a slower rate [aka “sustainable growth”], and yet, this downward change of growth rate will have negative economic impacts. This is the outcome of an economy where growth is institutionalized into the capital structure of every corporation and business, into the economy itself, where every dollar issued has growth expectations. Everything must grow.

Further fall in US home building

http://news.bbc.co.uk/2/hi/business/7049098.stm

17 October 2007

The number of new homes being built in the US fell by 10.2% in September - worse than had been expected. Earlier this week, US Treasury Secretary Henry Paulson warned that the downturn in the housing market was likely to persist longer than had been expected. It would "continue to adversely impact our economy, our capital markets and many homeowners for some time yet", he added.

IMF warning over slowing growth

http://news.bbc.co.uk/2/hi/business/7037005.stm

10 October 2007

The global economy may face a marked slowdown next year as a result of the turmoil in financial markets, the International Monetary Fund has warned.  A sharp slowdown in the US economy is expected to constrain growth next year.

In separate remarks, the IMF warned that Eastern Europe was particularly vulnerable to a reduction in capital flows as a result of the global credit squeeze.

Capital Structure Flaw of Public Corporations

SUMMARY

The issue is not whether "growth" is a flawed concept. Growth itself is a vague term that has a wide variety of meanings from individual to individual and is generally viewed as "a good thing"; however, the emphasis of compounding growth as a national economic policy measured by the Dow Jones Average or Gross National Product may not encompass all the desired attributes of growth.

An investor wants to recover his equity before investment failure; hence, the search for the greater fool, the greater fool being the investor who buys the stock of a corporation just as perpetual growth slows or ceases. The public stock market is the most opportune market to find the last buyers, hence the greatest fools.

When a corporation's stock declines, an investor's losses can be offset with gains in other corporations using a diversified corporate portfolio. When an industry starts to decline, an investor's losses can be offset with gains in other industries using a diversified industry portfolio. The diversified portfolio is insurance that the investor will only be fooled part of the time.

CONCLUSION

Ever-increasing Growth, as measured by compounding interest concepts, is an inherent flaw embedded in the corporate and debt structure. Collapse is inevitable.