The huge rise in the US stock market in 1999 has created the paper wealth that has convinced millions of Americans to go on spending. The value of stocks and shares held by American households compared to their total income rose from 3.5 times in 1995 to 3.8 times in 1999. And it's not just households that are keeping the US boom going. US companies are spending at unprecedented rates on new equipment. They are doing this because they have to.
Competition is intense.
And corporations are convinced they must invest in the technological revolution or die. They believe that the resultant increased productivity will keep them in business. But most of all, they are counting on the move into the internet producing a huge leap in their share prices, so increasing their wealth and buying power. And up to now, they have been right. The internet revolution not only continues to fuel the stock market mania, it is accelerating it.