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

To: Earlie who wrote (71380)12/3/1999 12:38:00 PM
From: Freedom Fighter  Read Replies (3) | Respond to of 132070
 
Earlie,

I'm slowly coming around to the view that the government inflation stats are almost totally irrelevant as far as interest rates go.

I think interest rates generally reflect the supply and demand for capital. The inflation component, whether it is measured properly or not, is part of the demand side of the equation.

Summed up, I think there are leveling effects between, savings, investment, "nominal" GDP growth, expansion of bank credit etc... that force interest rates around even if we have no clue what the real inflation rate is.

Wayne



To: Earlie who wrote (71380)12/3/1999 6:07:00 PM
From: BGR  Read Replies (1) | Respond to of 132070
 
Earlie,

Against this backdrop, how do you reconcile the fact that Euro continues to drop against the dollar (and so may the Yen if the Japanese authorities finally give up trying to talk the Yen down and let the printing presses run)? And that gold's brief run seems to have stalled? What gives?

-BGR.


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