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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (66557)	8/22/1999 7:54:00 AM
From: valueminded	Read Replies (2) \| Respond to of 132070

William: Given how he telegraphed the increase last time and he has been less transparent this time, I have to agree with PC he is inclined to do nothing this time. What he is weighing is the possibility of initiating a sell off in the market vs who he will find to buy our debt. He will err on the side of "who we need to sell our debt to" as I believe he feels that inflationary policy as is easier to rectify than deflationary. imo (Look at Japan) Given the closeness of the discount to the actual inflation rate, we have essentially a 1% cost of money anyway. ie inflation at 3.5 and discount at 4.5 What amazes me is that anyone would buy our debt at these levels anyway. My opinion, look for inflation exceeding 5% this year and the long bond moving up between 7%-8%. The market will take it in stride and ignore it. (This doesnt change my longstanding view that this market is waaayyy overvalued) Until I see the daily coupon passes ending (signifying a drying up of liquidity) this market will continue to have legs.