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Strategies & Market Trends : Asia Forum

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To: eWhartHog who wrote (4057)	5/31/1998 10:54:00 PM
From: MikeM54321	Read Replies (1) of 9980

This is directly applicable to our foreign countries supplying liquidity to our markets discussion. I didn't realize US rates were so much higher than the European countries mentioned below. From Paul Erdmann's economics column comes the following clip: >>...In the current environment, such international considerations speak against the Fed raising rates. Even at current interest rates, we are sucking funds out of countries and regions where liquidity is badly needed to New York, where "excess" liquidity is driving the markets and the economy to, perhaps, excessive heights. Why? Because, with one exception, the U.K., we have the highest interest rates in the developed world. Using equivalents to our Fed Funds rate, the picture is this: US 5 1/2 percent Germany 3 1/2 percent France 3 1/2 percent Switzerland 1 1/2 percent Japan 1/2 percent To raise our rates even further would further distort the global flow of capital and elevate the exchange value of the dollar to intolerable levels.<< MikeM(From Florida)

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