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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (49)8/12/1997 3:52:00 PM
From: Arthur Tang   of 435
 
The new economy in the world economy?

Tailand needed loans from IMF $16 billion. Malaysia is next. These export countries got their lunch eaten by other countries, when they failed to secure their regular business in America.

Wall street is taking in a lot of money from around the world to invest in America. This removes liquidity around the world. Potential crisis starts this way. Feds can not tighten in any way because they will tighten the world liquidity as well.

Recently Feds raised 0.25% on overnight discount rate and tightened the liquidity because member banks had to pay 5% more total interest payments. Liquidity was so tight that Feds had to repo every two days.

World economy is now much more closely tied. FEDs must be more aware of it.
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