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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: fedhead who wrote (49162)12/19/2000 3:13:27 PM
From: pater tenebrarum  Read Replies (1) of 436258
 
well, this is were Greenspan's (officially uttered) views and mine diverge sharply...i think he can't do a thing. the best cure for a bubble is not to let one develop, as Richebacher once said.

what would happen if he flooded the system with liquidity? none of it would go to cash strapped new economy firms, that much is clear. most likely it would gravitate towards the still hot real estate bubble, further undermining the economy's structural soundness. some of it would find its way into raw materials inventory rebuild, and thus help boost commodities prices, as well as in the very short term the earnings of certain cyclical industries.
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