Intel Corporation (INTC) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC)

INTC 37.81

-4.3%

Dec 12 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Ali Chen who wrote (168547)	7/21/2002 1:09:36 AM
From: FR1	Read Replies (2) of 186894

Ali, I understand your concerns about the market "obviously exploding" - but if inflation was not clearly out of control why should we try to fix it? What evidence do you have that leaving it alone would do less harm to the American society? This is the logic the FED uses to defend itself. "Why did I destroy the economy when there was no inflation? Because I am a inflation fighter and it was just around the corner. Thanks to me you are all safe now." Here is an example of why you should not fight imaginary enemies: In the middle of the 1990's there was a popular theory that economists had. The theory was that if unemployment fell below a certain point horrific inflation would occur because employers would start paying outrageous wages for the scarce skilled workers and that money would be put into the price of products causing inflation. Many economists came to the conclusion that the magic number below which we could not go was 5%. You would see infration right away. The theory was so popular that it had its own name. I went back and looked up what AG said as unemployment hit the 5% mark - he was clearly disturbed. However, because of the pacific basin crisis and the Russian crisis the FED was forced to stay away from doing a tight money program. When unemployment broke through the 4.5% barrier I found AG commenting that this was absolutely unsustainable. Unemployment then went all the way down to 3.9% and stayed there with no inflation! In other words, the theory just plain wrong. Now had there been no international crisis the FED would probably have done a tight money program to get unemployment back up "where it should be" and we would have had tons of layoffs, plant closures, etc. The FED would be explaining to us how they stopped inflation just before it happened. What's worse is that they would still beleive in the theory. So the answer to the question "What evidence do you have that leaving it alone would do less harm to the American society?" is that we don't know either way but what we do know is that it was a really big mess taking the path AG chose. The moral is that we need less itervention - "If the clock ain’t broke - don't fix it."

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next