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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: limtex who wrote (39865)8/7/2001 9:31:17 AM
From: Jim Willie CB  Read Replies (3) of 65232
 
I think GreenSnot admitted his mistake with January policy change that began the six rate cuts
now he is out of ammo
to answer your question, in 1992 FedFundRates were 3.0% for several months
the key fact is that for some of that time, rates were below inflation

I think the Fed will cut rates again twice
you focus so much on GreenSperm
half the regional governors believe inflation is a threat
EVEN STILL NOW

this is a pervasive policy and institutional problem
a bunch of unaccountable hidebound reactionaries police our economy in the dark, using dark ages methods, and heretical economic assumptions

I see some of the current problems as the Y2K Aftermath
the whole world set up 2000 as a time target
they expanded purchases to rectify old legacy systems
millions of antique lines of code were fixed on date formats
as purchases escalated, so did production capacity
while they were at it, they efficiently replaced linked older systems as well
investors saw all this unfolding, and bought into it
meanwhile, stock valuations shot up to unseen levels

now we have problems with both excess capacity and reduced demand need
and stock losses are unprecedented

the Fed misjudged the competence of software developers
the Fed misjudged the waning demand for equipment afterwards

AND NOW WE MISJUDGE THE TIMING OF THE RECOVERY
/ jw
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