RECY Looking Good... A Message Board

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Non-Tech : RECY Looking Good... A

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To: ed doell who wrote (5907)	9/29/1998 8:30:00 AM
From: Brewmeister	Read Replies (2) of 7006

Ed, If lower interest rates can accelerate the economy, it can create excess demand driving prices up. So, it is possible to turn things around. I'm not sure Japan is a great example of the failure of low interest rates since its economy and market structure is so screwed up. That said, I don't think a sole US 1/4 point cut in the fed funds rate will do it. Probably not even a half point. Half a point in the discount rate might - along with a few cuts in other countries. The a drop in the prime. The big question is whether or not the US and perhaps a handful of countries can be an engine of growth for the rest of the world. Seems an awful tough task. However, there may not be many other options except for time - which we may not have the luxury of waiting for. It is interesting that today, it seems that infrastructure projects are in big demand. Just check the US power industry to look at new capacity additions. It has taken an enormous jump recently (hot summer, power shortages help). This should continue as the effects of deregulation become clear. A cut in interest rates will only helh this capital intensive industry that uses a small bit of steel. Of course, all IMHO Dan

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