Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (16240)	3/6/2002 3:06:49 AM
From: Maurice Winn	Read Replies (2) of 74559

Jay, <better news for one who is sick of eating hamburgers on interest income. > in my now years old script, after the events now transpiring, [stock market cleanout of dot.coms and telecosmic exuberance concurrent with super printing and interest rate slashing by Uncle Al, combined with synchronized action by Japan etc to avoid a self-sustaining collapse of asset values - which has been highly successful], once the markets had stabilized and the bottom was in, Uncle Al would rapidly raise interest rates to avoid abandonment of the currency and avoid a reignition of irrational exuberance. So, while you are having a bit of a lean time with your hamburger-rated interest income while the squeeze is on, be patient and you'll soon find you are earning high interest again. Uncle Al must raise interest rates quickly once the turn is certain: He doesn't want the US$ abandoned Which would cause an excessive drop in the US$ vs others Nor does he want stockmarket irrational exuberance Which is going to be hard to avoid even with rapid rate rises He'll need to get rates high, ready for the next financial event Those events are always coming Gold irrational exuberance will need squelching Inflation will be burgeoning - not good That'll help fix the budget deficit [taxes on interest] So far, so good [though the stock market cleanout was more dramatic than I thought it would be in the techstocks - but the great news was the complete lack of self-sustaining collapse, which was a real breath-holder] That's the theory anyway. Waiting for the first interest rate rise [I guess March]. Beyond the cusp, Mqurice

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