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Strategies & Market Trends : ahhaha's ahs

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To: FR1 who wrote (669)	12/22/2000 12:53:00 AM
From: ahhaha	Read Replies (2) of 24758

1) The FED claims they are only fighting inflation. Then they have never so much as won one year of battle because since 1980 there hasn't been 1 year with 0 CPI inflation. What they mean by 0 inflation is actually 2.5% inflation. They can't get it lower than that because the market puts a premium of 2.5%/yr due to FED interference. Everything I'm saying is understood unknowingly by all the participants as a gestalt. It's the rent society must pay to maintain a system which is inclined to destroy the economy. 2) They say that if we do have inflation they will have to raise interest rates and hurt the economy. This is what we pay for, a loaded gun. It makes economic life exciting by bringing regular crashes and other tumult. 3) Therefore, even though there is no inflation, they must raise rates because inflation might come sometime and force them them to raise rates. But there is inflation. Housing and medical is about as bad as the worst periods in the '70s. The true core rate is about 3-4% even though it seems that currently it's running at 1%. Our society has unintentionally allowed ways to hide the fact that some holy cows are the culprits behind component inflationary pressures. You can see one of them in how quickly strikes are settled. The settlements are not made public, but effective settlement compensation is running at 10% per annum much of which is hidden in the medical component of the settlement. The unions don't want to make this public for a host of bad image reasons including the belated recognition that unions in other industries will have to sue for something commensurate. This process is the cause of structural inflation. The unions know this and know that if they divulge their high gains, others will mimic the settlements and the gains will be eroded by across the board price increases. It's beggar thy neighbor fairness in compensation". The only force that can break this will to inflate is the FED. The FED doesn't want to do this, but if they don't, the situation will degenerate to hyper-inflation. The FED through their intervention sews the seeds that enable the psychology to evolve that the little guys can get their unfair share through the monopoly of the ugly mob. Then the FED must break that psychology by breaking the pretenses of the little guys back into the Stone Age. Of course, everything else including anything constructive must be thrown out too. If you want stable economy, you have to get the FED out of the market. Then no excesses can ever develop. Why is this so difficult to see? It's like the fireman that sets a house on fire because he has a hunch that it might catch on fire someday. More like the fireman lights the fire to show the public that firemen are needed. Philosophers have a name for this kind of logic but I can't put my finger on it. Petitio principii

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