New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (203)	1/25/2000 8:06:00 AM
From: Arthur Tang	Read Replies (1) of 435

Why the importance of maintaining the status quo? In economy as in many engineering processes, there are many variables. If you should change one, the side effects are perhaps unknown. If you study the side effects, eventually, you understand the most significant variable. Which if you change little bit, changes the results a greater deal than others. By the greater change, it may not have larger side effects. To study the cause and effect, we use the classical thermal dynamics analysis. Where all variables are separated into those in an imagined box and those coming into the box and those going out of the box. When any variable is imagined to have a change, a formula which governs the process will reveal the changes of all others. This the best analytical method. With this tool we can fix status quo. The extend of the status quo we can change, and the speed we can use, depends on another engineering process. It is called servomechanism control. Servomechanism uses energy to power a change then dampens the change to remove any random oscillation. The best change is using just enough power to move it to where you want it to be. No positive feedback and no negative feedback needed. Status quo then becomes the new status quo until another change is necessary. FEDs using top down economy policy often did things without knowing the above principles. Too much change then too little correction or the reverse. The new economy policy took out the influence of the FEDs gyration policies and we have a status quo which can be maintained nicely. We work with microeconomy (business profits and expands) and the top down economy policy has to accommodate the expansion. Trailing the expansion of real economy, makes monetary policy safe.

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