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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (210)3/5/2000 2:34:00 PM
From: Arthur Tang  Read Replies (1) of 435
 
Money flow and a roving economy?

Demand side economy this year is going though another shift. Money has been flowing to new cars and truck. Now this year the interesting new product which is called "crossover" will be taking a lot of money from food, clothing and shelter.

FEDs were still talking about the 6.9% rise in last quarter of last year's economy, not knowing the shift in products' popularity. Growth rate will even out. But money is flowing into long term lease or 6 year loan purchases of cars and trucks. The tightening effect on the supply of money is going to be felt, everywhere, even the stock market. We may expect a loosening of monetary policy in the march FEDs open market meeting. Interest rate should come down a notch. In fact, the FEDs have been supplying liquidity to banks for some time now, by buying back or repo the long term treasury bonds.

Greenspan should know better. Only one industry is going to do better, the rest of all the other industries will be reduced in growth, already. Watch out for the money flow on your watch?

Fine tuning of discretionary income is the only way to balance the new economy. That is done by obsolescence and replacement of products to shift money spend back to food and clothing and shelter including furniture, etc.. Interest rate should be steady, so all other variables can be changed without upseting the new economy.
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