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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: patron_anejo_por_favor who wrote (4383)7/19/2000 3:55:59 AM
From: Dave-in-MarinCa   of 436258
 
Tom's post <http://www.siliconinvestor.com/readmsg.aspx?msgid=14064230> leads to
Mr. Moto's observation; "The dollar exchange rate appears tethered to the level of share-asset prices as they rise. The dollar can, however, begin to weaken and fall away. It's then that a surge of bank money lifts share-asset prices, and subsequently the dollar exchange rate fixed to the lift" Moto's work highlights the Feds dilema in terms of attempting to control inflation in the midst of the bubble. Moto's graph of "Reserve Impact of Temporary Operations" and interpretation shows the extraordinary efforts the FOMC is taking to hold things together. In order to attract additional foreign investment into the US to support the dollar, they're forced to continue to liquify the M2 to maintain equity prices which concurrently drives up personal consumption and inflation. They are then forced to maintain a tightening bias on the feds funds rate to control spending and inflation. How long can this go on??? I believe Greenspan knows the clock is ticking...on July 12, he stated "....To repeat, we do not, and probably cannot, know the precise nature of the next international financial crisis. That there will be one is as certain as the persistence of human financial indiscretion..." <http://www.federalreserve.gov/boarddocs/speeches/2000/20000712.htm>. What/when will the event occur? Will US financial indiscretion trigger the "event"? Mind boggling!!!
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