Hutch,
I'm going to chime in here about the Fed, but feel free to tell me why I'm wrong - or just to tell me to get bent and mind my own business.
I think (maybe)many are looking at the Fed wrongly.
I think the Fed is looking a short way down the road and also a little further down. While it looks now like there is not enough credit on the market now, I think that when the Euro debt is issued in ,just a couple of months, we will see far more world wide quality debt instruments than anyone can imagine. This will be one monster supply hitting the market.
I'm guessing, that with everything looming- Y2k domestic US dollar demand, a new currency bigger than the US dollar(2001 or 2), a this new strong Euro debt, and current US political situation, he is afraid to do anything that would make people think he weakened the dollar any.
To just keep the wheels on this thing, the US government must borrow incredible amounts of money every year. Next year ,when the Euro debt is issued, demand for new US debt bonds from Europe will go to near Zero. Some of the current Asain customers for US debt instruments will go to a (higher yielding) Euro bond.
All Greenspan can do is pump up the number of dollars floating around in banks. This has allready been done, they just have not been released. The release of 1/2 billion dollars(currency) to banks is scheduled for after March of next year to allow for people that want to withdraw everything(in cash) well before year 2000. If he whipsaws
excessivly to loosen to tighten to loosen he will be seen as not knowing what is going on, and people will loose even more faith. after all, the only thing that keeps it all running, is faith.
Russia just came apart "ahead of schedule". Wait four months, there will be more supply of debt than the world can buy. His job is not to
fix the bad Russian & Asain systems, but instead to keep the US dollar
afloat and the economy unchanged throughout all future problems.
Remember what he said a couple of months ago, people have forgotten to look at money supply?
rh
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