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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

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Nov 6 4:00 PM EST

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To: Moominoid who wrote (6833)	5/29/2006 9:46:27 AM
From: elmatador	Read Replies (1) of 217561

"...What we don't need today is a greater supply of dollars. What we need is a greater demand for dollars. The way you improve demand for dollars is to take those steps that will give people confidence in the dollar and its purchasing power for a long period of time. Message 22494372 Such as? Raising interest rates, just as Volcker did, at a pace that is not measured, but rapid. ELMAT: It will suck USD into the US economy and deplete the countries where there's economic activity and no capital Wouldn't that come with a lot of pain? ELMAT: Yes,but not within the US! When you take away the punch bowl, you are left with the hangover. We have to recognize we've far exceeded our ability to live at the level at which this country has been living for the past couple of decades. There is going to be some pain and adjustment. But if the dollar's purchasing power is destroyed, as a consequence of not taking strong action the pain is going to be much greater. ELMAT: He's talking about pain elsewhere. Not in the US! In what sense? When Volcker raised interest rates, we had a severe recession, but eventually the adjustments led to a period of economic growth, and we continued to create new wealth from economic activity. ELMAT: This was financed by the capital exporting countries that have been indebted in the wake onf the two 70's oil shocks. Bernanke is already toying with the idea to "...create the Raising interest rates, just as Volcker did, at a pace that is not measured, but rapid." Just rememebr Bernanke-Bartiromo incident. Message 22490585 Once he's sure is doable he'll go for it. Problem is: Will it work?

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