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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

3:59 PM EST

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To: kvkkc1 who wrote (48526)	2/8/2001 11:20:42 AM
From: Steve	Read Replies (2) of 77399

KNC, That kind of inflation was caused exactly by a non-interventionist FED. The FED had a long history of acting too little too late until Volcker was appointed by Carter. Volcker restored the FED to the strong Chairman dominated institution that it is today with a clear focus on its primary purpose of taming inflation. The inflation of the 1970s and 1980s was caused by the FED ignoring inflationary pressures. The money supply had to expand to accommodate the massive increases in crude oil prices but that in itself should not have led to the decade long increase in the price level that culminated with double digit inflation long after those increases in energy prices had found their way through the economy. There was a systemic problem called spiraling inflation and because of this inflation people and businesses were less willing to invest for the long run, this led to stagflation. I don't consider Greenspan's nervousness about inflation to be trivial at all. Inflation is the cruelest tax of all and it doesn't take much neglect to have it become a systemic problem.

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