To: RocketMan who wrote (67505 ) 2/18/2000 9:48:00 PM From: Boplicity Respond to
I can't disagree with what you are saying. But if you think like the FED does, the gradualist approach is the correct path. One of the consequences of what the Fed is up to are the market swings we are having. The market is speaking to us. The market knows that the we are in sea change, and there is money to made on picking who will benefit from this change, but it also knows the higher rates are bad, at least that the old accepted view when applied to the old economy. The problem with raising interest rates is that the high-tech industry, which is largely responsible for the our new economy and where the greatest gains are to be found, will not be bothered by higher rates as much as the old economy. Another problem the FED will run into as it tries to slow the market advance, is that the market is providing capital in the form of increasing market capitalization, this new paper money is increasingly being used to build and mold the new economy. Maybe the above is why he says he doesn't know what money is anymore? <g> He is stuck, and he knows it he can't plunge the market into a extended down turn. Frankly I wish he would just leave it alone. But since the alternative is the Fed reduce margin rates, or worse an increase in capital gains taxes. Both of the above actions would be insane, and surely would halt the market in it's track and blow the tires right out from under the new economy right when it is being defined. When you get right down to it and look at the dynamics of our economy and how the Internet and our increasingly connected world is changing our collective lives, the economy is way beyond what the FED can control so all and all I really don't see as much risk as you do.
