Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 237.60

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Nov 21 9:30 AM EST

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To: manohar kanuri who wrote (165)	11/16/1998 1:45:00 PM
From: manohar kanuri	Read Replies (3) of 1989

Speaking of Krugman, the FT and so on, here's a question for economists in the house ... something that's been bugging me since all the talk of unconventional ways out of liquidity traps and dropping yen from helicopters.... What happens if monetary authorities were to burn currency in town squares? Oh, say in the Ginza district (and maybe in Times Square next year). Without lowering rates (an academic question at a quarter percent). Would this symbolic gesture put a scare into people and send them scampering to dig money out from under mattresses and go spend it for fear of it becoming valueless? Kind of virtual/simulated inflation simply by creating the mindset in the public.... panic about "disappearing" money? Even to a non-economist like me it seems pretty obvious that lowering rates generates new investment thus exacerbating supply but there's no earthly reason why the Japanese should say to themselves - Oh I'll eat an extra burger today, interest rates are so low! Aren't they more likely to do that, eat more burgers with a side of widgets, if they think that their money will have less value tomorrow or may even magically disappear from right under their noses? What am I missing? (unless you're related to me you are not entitled to say - your marbles.) mano

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