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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: jwk who wrote (23)	1/5/2000 5:45:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 621

LOL! you know what was reported on CNBC Europe today? i'm not kidding, they said: "the ECB has problems mopping up the liquidity provided for y2k as dealers don't want to give the money back" btw, i agree that in the long term the road to universal well-being is more or less assured. but the current boom rests to a large degree on the Fed's easy monetary stance over the last few years (note that every crisis in the financial system was papered over by printing more money and allowing the speculative bubble to grow further and thereby not allowing the built up excesses in the system to be wrung out). it is erroneous to assume that their stance was warranted by low CPI inflation. that's exactly the mistake made by the Fed in the 1920's, as Alan Greenspan himself attests to in this essay he wrote in the late sixties: gold-eagle.com now of course, he has been seduced by the lure of the new era...people easily forget that there is no free lunch. Utopia is still a ways off. regards, hb

To: jwk who wrote (23)	1/6/2000 12:24:00 AM
From: JF Quinnelly	Read Replies (1) \| Respond to of 621

Personally, I favor the disinflation, rising productivity, tech advances road to universal well being, But you had all three of these in the 1920s. It appears as if the productivity-induced deflation of the '20s fooled the Fed into permitting too much credit growth-- had they not attempted to maintain a constant price level, prices generally would have dropped due to the increased productivity. But the absence of inflation in the price level allowed the Fed to keep the taps open far longer than was wise, fueling an asset bubble at the end of the decade.