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Politics : Formerly About Applied Materials

AMAT 220.28

-6.4%

3:59 PM EST

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To: 16yearcycle who wrote (25405)	10/17/1998 5:25:00 PM
From: blake_paterson	Read Replies (5) of 70976

More food for thought... pei-intl.com Lower Rates: Bullish or a Bearish Omen of What is Yet to Come? By Martin A. Armstrong October 16th, 1998 Princeton Economic Institute The Fed's surprise move to cut not merely the Funds Rate but also the Discount Rate ¼ pt on the Ides of October has been hailed as a bullish signal by stock jockeys to rush back into the markets...... ...Do we rush back into the marketplace casting caution to the wind, or step back for a moment of reflection? ......The myth that lower interest rates are BULLISH for stocks and higher interest rates are BEARISH, is perhaps the single greatest lie of all time. As illustrated here, the Fed raised rates from 3.5% in 1927 up to 6% in 1929 and the Dow Jones DOUBLED. The Fed responded quickly to the debacle of 1929 and lowered rates from 6% to 1.5% within less than 2 years while the Dow Jones collapsed by 70%. In the 1994, interest rates were at the low. The Fed raised rates 8 TIMES between 1994 and 1998 and the Dow Jones again DOUBLED! Now that the Fed is lowering rates, take a look at the above chart one more time just for the hell of it. Ask yourself, Did the Fed lower rates in 1929 because of problems? Is the Fed lowering rates now because of problems?

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