Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: THE ANT who wrote (29099)	5/1/2005 5:52:56 PM
From: SouthFloridaGuy	Read Replies (2) of 116555

You are most likely correct. Greenspan had to choose between all out crash and the potential for muddle-through. He obviously chose the latter. He allowed companies to refinance and build their war chests. The housing speculation was a consequence and will now be dealt with. I don't think the Fed gives a hoot about over-leveraged homeowners and will continue to raise rates to beat inflation. The goal in 2000 was to keep American companies competitive and at least semi-solvent so that they could continue when the economy really does nosedive. In this respect, I admit they succeeded. Where I feel the Fed's failure could possibly come is in their allowing to let the financial sector become such a big proportion of the Economy. The Achilles heel of every deflationary economy is loss of faith in the banking sector. The seeds are planted for a financial disaster and then all the Fed will have done was postponed and worsened the day of reckoning. ALL IMHO.

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