Galapagos Islands Message Board

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Strategies & Market Trends : Galapagos Islands

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To: Jorj X Mckie who wrote (44839)	7/23/2003 1:48:20 PM
From: MulhollandDrive	Read Replies (1) of 57110

>>Don't fiddle with interest rates, don't fiddle with money supply. Let the system digest all of the stuff that has been thrown at it, so that it can reach an equilibrium<< that is more or less what i said the other day...(can't remember which thread) so the fed is saying it would drop rates to "zero" if necessary....the fight against deflation is not a "monetary" one and the fed knows it. what the fed is trying to battle with easy money policy is to stimulate capital investment. and you and i both know that it will not happen without corresponding pickup in demand. so for now i believe the best they can hope for is "muddle through" ....next fomc meeting state that there is no need for further cuts (assuming "low inflation" remains stable though stagnant would be a more apt description, imo)...so they can stand pat.... hoping that the perceived message is steady as she goes... i think the last thing the fed wants to do is lower rates, but would love to get a few more months of "no change" buying time. all the while knowing you can lead a horse to water but you cannot make him drink..(meaning increased visibility in capital expenditures)

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