New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (276)	5/2/2001 7:32:43 AM
From: Arthur Tang	Read Replies (1) of 435

Controlling a successful economy takes discipline. The discipline is to only adjust one variable at any time. If more than one variable got adjusted at the same time the side effect of both can be extremely confusing. Making further adjustments very difficult. In mathematical terms, the economical formula is complex and difficult to write. And each day it is changing in direction and scope. So, the decline if it is caused by arbitrary interest rate adjustment; then the improvement has to be reversed interest rate adjustments. Using thermal dynamics analysis, what is taken out of the member banks of the FEDS, has to be put back to previous level. Using servo mechanism analysis you can plan the length of time which you should keep the interest rate low before return it to normal(5% overnight discount rate). FEDS already lowered interest rate sufficiently and should hold it for 6 month before returning to 5%. They have yet to formulate the multiples to bank reserves to allow economical growth in their monetary policy. Which can be tempered by the profit generated by industries and businesses. Which is the economical growth of about 3%(profit target of businesses and subsequent reinvestments) each year.

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