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To: CYC who wrote (77068)	11/26/1999 9:20:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 86076

CYC, i agree that ultimately all this printing will lead to inflation... regards, hb

To: CYC who wrote (77068)	11/26/1999 12:48:00 PM
From: Ken98	Read Replies (2) \| Respond to of 86076

CYC, I too have been wondering why the Fed is doing what it is doing which, at a minimum, is reckless. Heinz is correct that the Fed is trapped by the bubble and the Fed can't overtly pop the bubble or it would create a political firestorm that would jeapordize the independence of the Fed. Can you imagine the calls and letters coming into Congress from all of these mutual fund holders if the NDX were to trade at even a historical valuation level? The compelling questions are (1) how did we get here and (2) what are they going to do next. How did we get here? I think the Fed's central focus has shifted from ensuring the stability of the monetary policy to ensuring unending prosperity (or at least the illusion of it in the form of an ever rising stock market). This has occurred primarily because of the fusion of retail banks, investment banks and insurance companies (that are the constituent members of the Fed) have a new profit motive to perpetuate and inflate the bubble rather than their old motive to ensure interest rate stability. The FOMC is composed of 10 members - the 5 from the Board of Governors and 5 from the heads of the 12 regional Federal Reserve Banks. The Board of Governors is appointed by the President. The heads of the regional banks are selected by the Board of Directors of that bank who, in turn, are selected by the voting members of that regional bank (ie. that region's banks). bog.frb.fed.us Here are a couple of list of regional directors: rich.frb.org ny.frb.org As more and more of these member banks derive more and more of their income from stock underwriting and brokerage activities and market making they will vote their pocket book when selecting heads of the regional banks. The repeal of Glass-Stegall will only accelerate this. Expect more "new age" idiots like McTeer to pop up. And as long as they have a pliant executive branch feeding them cooked stats showing no "goods" inflation the Fed can profess to "doing its job" while shoving ever more money into the system and fueling hellish "asset/credit" inflation - thus ensuring the profitability of the constituent owner banks. No conspiracy, just economic reality. What are they going to do about it? Keep shoving money into the system until they have completely debased the dollar and are compelled to take action. Regards, Ken.