Scott, anyone with two eyes and a pulse and functioning brain can see the unfortunate pattern of behavior by the Federal Reserve
they left things alone from 1995 to 1997 and wondrous things happened
since then we have had the Asian Meltdown, Russian Default, LTCM Collapse, Y2K Bubble, post-Y2K BurstBubble
all at the hands of the Fed and GreenBrainless
in 1998 in response to crisis, GreenDog cut rates way too much
but Robt Rubin was looking over his shoulder, salivating at his blind trust stock account imminent gains
not to mention the gains upcoming for his cronies
Greeny let things go down too far in 1997-98 with the Asian Collapse
we benefited in the form of cheaper imports for months on end
but we paid for it when the shock wave made its way across the globe, into our NYC banks
I enjoy the heat put on the Fed now, but it is not enough
too many in Congress still revere the man and his mysterious policy
he talks in a foreign language to the men/women he is supposed to be accountable to
imagine speaking to your boss in cryptic terminology, phrases, abstruce concepts
the only solution now is for excessively loose monetary policy
it wont work until it goes too far, that is how it works
look at history
we are not talking about the stock&trade methods of 1970's, 1980's
they used tax cuts and other one-time intravenous injections back then
they were pathetic as the country's economy responded to the new OPEC pricing
now it is an undercurrent of liquidity that HAS to find its way into the equity markets
they inappropriately use the same tool to rescue
that is creating a vast rising watertable of money, which flows into capital equip, into paychecks, into consumer pockets, into stock prices
warning: if our banks begin to act like Japan's though, and stop lending despite lower rates, then we are screwed
we will get a lengthy recession
but the silver lining there, is that eventually an explosion occurs, with Naz rising 80-120% in a few months or weeks
just like a ruptured fire hydrant
/ jim |
