power of the households. As a result Savings are not invested i.e. Investment lags behind Savings. Money is hoarded, the circular flow of income in the economy stops and the economy gets paralyzed. Demand gets constricted which in turn constricts Supply. These constrictions worsen the situation even more because, on account of drop in production, the percentage of unutilized capacities increases even more than before which makes Investment in new capacities even more unattractive further increasing the hoarded money. The economy gets involved in a vicious downward spiral that can dramatically reduce incomes and severely aggravate unemployment. Ultimately after a few years, some huge Investment opportunity prompts entrepreneurs to start investing all of the Savings and the economy restarts on the expansionary path. Or it can so happen that the huge excess capacities get destroyed on account of lack of demand û for example, some new technology makes plants with older technology unsuitable to the new needs and such plants and factories become useless. This way excess capacity is weeded out making the economy conducive for Investment and growth. I believe that most business cycles in US and Europe prior to 1930s occurred in this way, they were all mostly Investment propelled. I would call those cycles û the Investment led Business cycles. How can stagflations occur? During the Consumption led cycles, after several years of growth, Consumption eats away into Savings and surpluses realized would fall short of expectations for the producers of Consumption sector. Savings are low and a correction is required by cutting Consumption and increasing the Savings. The extent of correction defines the strength of the next boom. If the correction is big and Savings are piled up in a large manner during the downturn, then, at the beginning of the next boom, it gives the chance for Consumption to nibble away at Savings slowly and steadily for a large number of years û booms can last very long. If the correction is very small, if Savings are not too large at the beginning of the boom, the boom is then nipped in the bud itself. As there are no large Savings made, as soon as Consumption tries to nibble away Savings, Savings would immediately fall below the danger mark and the surpluses expected by the Consumption sector are not realized and a recession would start as immediately as the boom starts. In such cases, the booms might not last for more than one or two years. Such cases
piece
is
an
abstract
triptych
that
I
found
while
I
was
in
Atlanta
buying
religious
paintings
The
piece
was
called
Guardian
Angel
and
I
love
it
My
patrons
fell
in
love
with
it
as
well
They
have
asked
me
to
track
down
the
artist
and
see
if
he
has
anymore
religious
paintings
available
The
only
religious
paintings
that
I
actually
do
not
buy
are
ones
that
reflect
the
image
of
Jesus
on
the
cross
I
don’t
have
a
problem
with
them
some
of
them
are
extremely
well
done
and
would
more
than
likely
sell
well
but
my
investors
made
it
very
clear
when
they
financed
the
gallery
that
I
would
not
put
that
image
into
it
PPPPP
683
Ajello
Candles
The
motto
of
the
Ajello
Candle
Company
is
“It’s
better
to
light
a
candle
than
to
curse
the
darkness”
This
candle
making
company
has
been
in
business
since
1775
The
business
has
been
family
owned
for
seven
generations
The
candles
from
Ajello’s
are
well
known
for
their
beauty
and
quality
While
they
make
more
candles
now
than
in
1775
their
dedication
to
quality
and
to
customers
has
never
changed
The
Ajello
Candle
Company
was
founded
by
Rafael
Ajello
an
Italian
painter
He
was
also
a
beekeeper
so
he
tried
his
hand
at
using
bees
wax
to
create
candles
He
worked
hard
to
create
a
formula
that
worked
well
The
formula
combined
with
his
outstanding
artistic
ability
lead
to
the
birth
of
the
Ajello
Candle
Company
In
1785
the
company
earned
the
honor
of
creating
all
the
candles
for
the
Vatican
He
and
his
wife
ran
the
business
keeping
their
children
involved
in
the
processes
from
an
early
age
As
time
went
on
their
children
and
grandchildren
kept
the
business
running
as
well
as
passed
the
family
business
on
to
their
children
By
1862
the
company
had
established
itself
as
a
leader
among
the
candle
making
industry
They
had
also
added
perfumes
and
many
.
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