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Strategies & Market Trends : ahhaha's ahs
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To: ahhaha who wrote (5537)10/29/2002 3:34:24 PM
From: ahhahaRead Replies (1) of 24758
 
If anyone doubts the stupidity of FED officials current and past, one only needs to read this blurb:

On top of the newspaper articles this week, former Fed Gov. Wayne Angell added his voice to the markets' clamoring for a reduction in rates, urging Fed Chairman Alan Greenspan in a Wall Street Journal editorial on Tuesday to cut rates 50 basis points and saying "the time to act is now."

"Providing enough extra monetary liquidity by a reduction in the target fed funds rate from 1.75 percent to 1.25 percent would enhance pricing power and ward off what is now a mild case of deflation," Angell wrote.

How does cutting rates add liquidity? Doesn't the guy know how the Fed system works? Apparently, having been vice chairman conveys no such knowledge.

But what's worse is his contention that lowering rates "would enhance pricing power and ward off what is now a mild case of deflation". In a previous post I provided a review of what people were saying about consumer confidence and why it was low. The core reason is rising prices. So what in hell is this fool talking about?

This shows a lack of elementary knowledge about what causes interest rate changes, the connection between interest rates and money supply, and a failure to understand what causes inflation or deflation. This guy makes $500Gs/year simply because he was entitled, yet he's a semi-functional illiterate.
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