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To: Frank Ellis Morris who wrote (138195)	7/31/1999 5:40:00 PM
From: Chuzzlewit	Respond to of 176387

Frank, I am glad that you reappraised Greenspan, but he is not above criticism IMO. Tight money, together with cheap oil, increasing productivity and globalization, were instrumental in wringing inflation out of the economy. However, I for one believe that the Fed has been overzealous on the inflation front, and that is where I find fault with Greenspan and the Fed. On the other hand I think that the Fed deserves a lot of credit in its handling of liquidity crises-- most notably October of 1987 and again in October of 1997. Inflation is of greatest concern to issuers of debt -- less so to equity holders. According to Jeremy Siegel in Stocks For the Long Run surprisingly, equities do well in inflationary periods although not at the onset of inflation. He attributes this to the re-emergence of pricing power. That explains why cyclicals such as aluminum do well in such periods. However, stock market returns usually decrease if you invest during periods when the Fed is tightening. I recommend this book highly. It examines the impact of any number of economic and political factors on the behavior of equities and comes to some startling conclusions. TTFN, CTC