Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (15965)	6/26/1999 5:08:00 PM
From: j g cordes	Read Replies (1) \| Respond to of 29382

"When inflation was in the double digits in the early 80's, it was fed by the anticipation of higher prices." This conversation could easily get vague, I erred in broadening the agrument. My contention is that the Fed doesn't need to raise rates, you took the position that a couple of 1/4 points is OK or even good. I don't agree because there's nothing that needs to be slowed down, dampened, quelled, supressed, calmed, or regulated right now. Its a useless exercise of Fed power attempting to keep the speculative equities market in line. Its bubble management not inflation management. It runs the risk of psychologically priming the anticipation of higer prices pump on some future inflation by seeding the thought there's real need to worry. It creates a price supportive and price raising environment in which producers feel encouraged to raise prices for oil, raw materials, wages, rates and fees.. even if actual market forces point the other direction. If there's no real inflation then the Fed doesn't need to jawbone about it in the first place. If there is inflation (and I'd agree that the equities market is a form of inflation) then lets let the market self adjust and settle its own bid/ask without Fed intervention.

To: James Strauss who wrote (15965)	6/26/1999 5:28:00 PM
From: j g cordes	Respond to of 29382

biz.yahoo.com As pointed out here its the worry over anticipation of higher wages due to low unemployment as foreign markets may finally be in a position to purchase our goods and services thus further stimulating employment and wage demands. So given this scenario, the Fed will raise the cost of US business being globally competetive by raising the cost of capital with a rate hike. Therefore who gets the new recovery and emerging market business and who's balance of trade suffers?