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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
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To: Alan Bell who wrote (7609)9/4/1998 1:30:00 PM
From: MrGreenJeans   of 42834
 
Recession Not Even a Remote Possibility

<<Why do you believe these recession fears aren't justified?>>

1. Most recessions are Federal Reserve induced. There is no chance Alan Greenspan and the FOMC are going to raise rates in the near future because of international concerns. If rates rise there are all sorts of ramifications one being a stronger US dollar and that complicates matters overseas. Again, absolutely no chance rates are rising.

2. The money supply has been growing at a healthy clip-another indication rates will not rise anytime soon.

3. Inflation is in check in part due to the Asian crisis and its effect on prices in this country. Imports are cheaper from Asia and that forces American competing companies to keep prices stable. One more reason rates will not rise.

4. The American economy may or may not be slowing down. The verdict is not in. I believe the Fed is still trying to decide whether or not the US economy is in a slowdown. Another reason rates will not rise.

5. The GDP has to have 2 negative quarters in a row for an official recession to occur as defined by NERA. GDP has been positive now for quite sometime.

6. Consumers have ample cash and wealth derived from a booming equity market correction or no correction. Seems to me like consumer spending is still healthy and looks to me like we will have a good holiday season.

Just some of the reasons...perhaps more later...

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