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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 337.09+0.2%Dec 4 4:00 PM EST

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To: marc ultra who wrote (1157)5/16/2001 9:09:06 AM
From: MrGreenJeans  Read Replies (1) of 10065
 
Marc

Regardless what happens in the short term the table has been set for the next cyclical bull. however as the money supply continues to power forward we are likely also setting up conditions for the next bear as well. This could very well be the continuation of a secular bear as by the time the economy gets going strong so much money may be swishing around that increasing inflation/inflationary expectations along with a growth spurt could set the Fed raising again.

Marc, as usual you post was well thought out and written.

I believe that the Fed believes at this point the money will be channeled into spurring capital expenditures and capital investments as well as into the financial markets the equity markets in particular. One possibility is that the money will be absorbed into the economy into productive non-inflationary type activities. Another is that if the Fed overshoots on the other side it will result in inflation. A fine line Greenspan walks but my belief is that with inflation not being an issue, currently under 3% on the core side, odds are that Greenspan is correct in his thinking.
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