New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (163)	6/4/1998 1:20:00 PM
From: Arthur Tang	Read Replies (2) of 435

The new economy and Russia? Russia in the last two years, have increased their agricultural products. On their vast resources, they have not been trying to produce vertically integrated products. This policy kept them in the third world development stage. They have exported some clothing and other goods into the US. They have exported continuously to the eastern block. They have sold some oil fields and gained some dollar reserves to $15 billion. Many Russians live and work in the US and mail money back to their relatives. Recently, miners' strike stopped trains to disrupt the transport of many goods. They have a liquidity tightening policy of not paying wages in arrears. They have no concept of interest rate and economical growth. They do not value productivity except in agriculture so far. On the other hand, our new economy fixed and steadied our interest rates. Then we work on our productivity improvements. The increased productivity demanded liquidity allowance. We have to print more money to satisfy our improved economy. Our monetary policy is to provide for economical growth. Russians did not understand productivity and liquidity; and they will have problems in their economy. They can print their own money, but they rather take money from some one elses' printing press. what is the difference between printing your own money (as much as you need) or have some one else give you some already printed money? Not much. Except it is more difficult to beg or to extort. Russia should provide liquidity where product and services are provided. Every dollar spent has to be on some value received. Until then their economy will not flourish. In communism, the people get paid and then the government takes back the money by providing products and services to people. To change to capitalism, the government gives the responsibilities to the companies which hire people and provide products and services to take the money back. But the government still has to provide safety net for people who are not qualified to get good jobs. Our government provides the safety nets by taxation. Some day when they understand liquidity, Russia will be a strong country with a new economy.

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