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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (4)1/25/1997 5:11:00 AM
From: Arthur Tang   of 435
 
US economy can not be spoiled by interest rate changes in overnight discount rate any more. The federal reserve bank can only use fine control of liquidity by absorbing all surplus liquidity selling US bills and notes. In the mean time provide liquidity in the banks by adjusting multiples of deposits for overnight loan qualification. Some coupons are still being used by Feds as of now. But bank customers themselves have to be encouraged to deposit compensating balance to provide their own loan credit limit. This will enable US ecnomy to expand without fear of inflation. Inflation is encouraged by excess liquidity, and higher cost of borrowing. (interset rate hike)

Currently Feds try to read tea leaves without understanding the changing technology. The computer automation in the elimination of middle management, make all past data not mine-able. The future has to be planned. The results of the expansion of the economy watched and adjusted. The results because they are planned, are always known ahead of the time. We advocate throwing the past data aside, and plan the size of the distribution, manufacturing, agrecultural output and financial services by allowing increases of 10% each year. Looking back the last 5 years we have done so and obtained some 3% real increases.

This is the new economy policy!
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