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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Peter Singleton who wrote (1331)2/28/1999 6:02:00 AM
From: Sam  Read Replies (1) of 3536
 
'What he doesn't say, but could, is if this is happening at a time of monetary easing, then the Fed may have used up its silver bullets."
Nonsense. Real rates are incredibly high right now. Inflation of maybe 1-1.5%, the long bond at 5 1/2%. Should be at least a point and half lower, and could be two or even slightly more lower, except perhaps for the "threat" of growth in LDCs and the erstwhile "Tigers".

The Fed has plenty of silver bullets left, and if the market goes down to the mid 7000s from here, it will be a scary ride, but not that terrible a thing for the economy or, in the long run, for the market itself.
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