I knowit sound contrarian, but look at the facts, the financials are the ones that got hit (other than mortgage.com), like Bank One (ONE)
for example. There being no free lunch, short term inflation is created by any increase in anything: money, Debt, Interest rates,
Mortage rates, loanrates, lines of credit, equipment leases, real estate purchases....then wages, salaries, then goods, then the cpi then more goods and services via cpi tied wage and union and salaries and even social security payments....ooops there goes the surplus!
Isn't that what Greenspan wants...to take the money away before either the market uses it, or the government spends it...If the government spends it (Note I am a conservative and not a liberal fiscally, genreally) they do indeed spend it somewhere, call it corporate welfare if you must, but it goes back to US and I mean US companies and busiensses, generally. However, when Banks get it, and I mean, the bigger the more so, and I include the Federal Reserve system and other central banks...eventually the pressure is to lower the stock market so that banking intersts can buy up stocks in blocks cheap, (yes dorothy, this sounds like the Wiz of Oz stoy I know), but the alternative to killing the market for a buy up, is to send the money overseas, and where might that be?...Europe doesn't need it, we would no send it to East Europe, at least not for a while, so that leaves Asia....goodbye money, IMHO, and goodby our economy, from that point on you are back to classical economics and classical spiralling inflation. That is why the this contrarian view is hard to understand, its the priming of the inflation pump that the Fed is doing, not stopping, despite what they say. Give us STABLE liquidity, I say, and let the market decide what to do with the money, not the Fed, not the banks, I think it will be better spent, and spent on high techs and internets, to make the internet e-commerce revolution a reality QUICKER WITH NO FURTHER DELAYS, and that, of course, is what all investors (over half our GDP) beleived in, when they bought these stocks at high multiples, these high multiples only will pay off, when (not if) and BECAUSE of increased productivity and efficiency both on the manufacturing and distribution side BUT ALSO the CONSUMPTION side, that is why there is nothing wrong with the wealth effect and Consumcer confidence, and with increased sales data, low unemployment, jobs, incomes, spending, we can consume what we produce, All is well, and well WITHOUT inflation. Throw rocks into the pond, and upset the stability of the liquidity of money flows into and out of the market, and even Greenspan and all the kings horses can not predict or more likely remedy an economy that will collapse if the market crashes, Year 2000 Y2K bug or not, the real bug is at the Fed. Not NASDAQ/AMEX or NYSE or Istinet or Paul Allen's Island Eclectronic Clearing Networks. Well, that my thought. I don;t care either way, cause I'll just buy bargains. Some people do not have that luxury, and it makes me nervous, thinking what kind of neighborhood may be living in if all my neighbors lose their jobs or houses or cars....maybe they will work cheap as bodyguards, maybe we can become like post KGB Russia or as screwed up as Japan or China if we give these guys at the Fed half a chance...maybe a two class society is the destiny, a farewell to the middle class that built the industrial revolution and much of what we can American.
And in case any of you wonder, I am debt free, a multi millionaire, and I play the marekt not work it, beleiveing as my father always said, that it is a form of gambling, and rule one is never put a dime in it unless you can afford to lose it all. I am just pointing out, many are not this lucky.
I am,
Truly yours,
-Crystal Ball |
