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To: BGR who wrote (72173)	10/27/1999 4:11:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 86076

BGR, we can agree on that. btw, the Japanese example shows that not even immediate aggressive easing is enough to save the economy from a bursting bubble. the Fed also eased aggressively after the '29 crash but made the mistake to get too tight later on as the depression was already well underway. the problem is that once the bubble in asset prices deflates all the debt that was collateralized with the deflating assets becomes worthless. that leaves the banking system with no choice than to cut back on lending, no matter how low short term rates go. i don't think Greenspan's warning to the banks was just idle talk. he probably knows very well what will happen once the party is over. trust in the government? LOL! hb