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Pastimes : Ask Mohan about the Market
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To: Bonnie Bear who wrote (14122)2/15/1998 7:21:00 PM
From: Tommaso  Read Replies (1) of 18056
 
"No, I believe the next problem in the U. S. will be
an inflationary surge in the money supply. What
always happens under those circumstances is that
when the Fed starts raising the interest rate, it
tends to overdo it. [Laughs.] The market will
overreact. And that's where you're going to get
your recession. "

This is Milton Friedman in an interview last December.

Here's the whole interview:

forbes.com

Well, we already have the inflationary surge in the money supply. It remains to be seen if and when the fed will overreact.

Friedman does not foresee a stock market crash. But to me, it's hard to see what other effect a recession could produce on the market. Maybe by "crash" he meant more than 50% down.

Not that Friedman is much more accurate than anyone else, but given his presuppositions and given what is actually happening, he is at least worth listening to.
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