"I've believed, for quite some time, that the fed has been tightening
the money supply because of the fear of bank runs counting down
to the millenia, more than the fear of inflation."
Michael, I have seldom read more infantile economic gibberish than this post. You exceed yourself.
If you glance at the Fed data, you will see that the Fed has been increasing the money supply rapidly, much faster than anyone believes is needed. Why would anyone tighten money supply to forestall possible bank runs. The money supply consists of currency and various bank deposits. The way money supply is tightened is for the FOMC to order FRB's to sell short term Treasuries which drains reserves from the system, drives up interest rates, reduces rate of lending. Moreover, far from decreasing cash the Treasury (and Filipino counterfeiters (+ $60 billion) have printed multibillions extra cash to provide for any panicky liquidity demand. Interest rates have very little direct to do with money supply. Money supply expands when borrowing from fractional reserve banks increases. As long as borrowers will pay the price, interest increases have no effect. If you trade on margin, I would be surprised if even you knew the rate you pay your broker.
"And I believe he will make attempts to consider
software development as a capital expense. "
Surely you know that tax law is made by Congress, and Greenspan has no control of tax conditions. As you may know, capital goods must be depreciated, certain intangibles (good will) must be amortized, and only goods with less than one year life may be expensed. A capital expense is an oxymoron.
"the bond market yield has gotten ahead
of itself, and instead of moving rates up in the first quarter of 2000, the fed is
more likely to move them down. "
Ah, if the fed could only move bond rates. You have fallen into the trap that destroyed simple minded Keynesian policy. The monetary authorities can do damned near anything they wish with short term rates, but they can do virtually nothing with bond interest rates. When lenders fear inflation, they sell their long bonds and shorten up their maturities, or lend overseas. The long-term interest rate goes up (housing and other long-term investment shuts down).
The Fed has no real influence on the rate.
If the Fed could lower the bond rate, it could stimulate long-term investment without affecting inflation very much. There was a long-time ago (in the 1960's), an attempt to twist the interest rates. The Fed and Treasury attempted to get people to pay up for LT bonds, while the short term rate was raised. Ineffective.
investinginbonds.com
Before you issue your professional predictions, why don't you learn something about the market for the public debt. Then you could go on to study some elementary monetary economics.
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