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Pastimes : Prophecy -- HYPE or HOPE?

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To: intothefray3 who wrote (914)11/3/2001 3:05:23 PM
From: SOROS  Read Replies (1) of 5569
 
"It was the first quarterly fall in nearly half a century, since the second quarter of 1954, at the end of a recession. "

The classic way to fight such a weakening economy is by easing monetary policy. But to be stimulative, the Fed needs to get short-term interest rates below the inflation rate. "The liquidity trap in economic theory arrives if the inflation rate falls below zero," said Robert Barbera, the chief economist of Hoenig & Company. "You run out of bullets before the inflation rate hits zero."

dailynews.yahoo.com
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