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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 342.29-0.2%Jan 29 4:00 PM EST

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To: Investor2 who wrote (4585)4/20/2009 7:00:34 AM
From: Boca_PETE  Read Replies (1) of 10065
 
I2,

The article is right on. If the FED removes the monetary stimulus punch bowl too early, the recovery will abort and we'll be right back in the abyss. If they remove it too late, an inflation will arise as it did during the 1970's and we'll end up in an inflationary recession. And, what's to guarantee that there even is an ideal point to remove the punch bowl where a new recession will not occur?

Before the 1970's, there was a time when we had a "stop-and-go economy" thanks to "stop-and-go" FED policies at that time. It pretty much coincided with the 4-year presidential election cycle. I'd speculate that we are going to be in that situation, instead of "fine tuning mode" absent geopolitical earth quakes. But to expect the absence of such geopolitical earth quakes is to be naive from my viewpoint.

Best wishes,

P
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