Excellent article John,
This is the part that rings my Bell <<smile>>
>>Mickey Levy, chief economist of Bank of America Corp. in New York, pointed to another reason that growth hasn't slowed much: the interest rate cuts the Fed made in the fall of 1998, when world financial markets seized up in the wake of a default by the Russian government on part of its debt. "We are only half a percentage point higher [on overnight rates] than we were in early 1998," Levy said. "Between then and now, the Fed pumped in a lot of money, and now it has to take some of that away."<<
And Here:
>>About the only place rates are not up very much is on the U.S. Treasury's 10-year notes and 30-year bonds, whose yields are little changed compared with last June. That's because the Treasury is issuing ever fewer new notes and bonds as the size of the publicly held national debt declines. With the supply of such securities likely to shrink over time, investors are snapping them up, driving prices up and yields down.<<
And Here:
>>"With inflation so low, wages aren't going up all that fast," certainly not enough to equal these interest rates, Glassman said.<<
Greenspan must also pay attention to International monetary pressures out of Asia, S. America and ECU. I expect the anticipated slow down will speed up shortly....and our markets will become range bound.
But I'm not an expert...just guessing on a hunch..!
Chip |
