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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (23653)	3/15/2000 1:05:00 PM
From: Lost1	Respond to of 63513

Message 13209762

To: Jorj X Mckie who wrote (23653)	3/15/2000 3:47:00 PM
From: long-gone	Respond to of 63513

A Good capitalismmagazine.com The Real Danger to the Economy is Not "Irrational Exuberance" But Greenspan's Irrational Pessimism Why Greenspan Trashes the Markets by Richard M. Salsman When Federal Reserve chairman Alan Greenspan speaks, markets listen. But Mr. Greenspan doesn't create wealth, as E.F. Hutton did when he spoke. Mr. Greenspan's speeches tend to destroy wealth. When money has stable purchasing power, businesses can plan more effectively and thus grow more quickly. Prosperity is a result of low inflation, not a danger to it. Last week, for example, Greenspan told Congress that he'll keep raising interest rates. In response, the stock market plunged nearly 3%-meaning that about $400 billion of wealth was destroyed. We have only Greenspan to blame for the drop, because there's nothing wrong with the American economy. Growth is strong, corporate earnings are up, inflation is down, job creation is robust. Rising stock prices reflect this good news-and the chance it'll persist. The market is an efficient mechanism for valuing companies. But the Fed presumes otherwise. It believes the market is a "bubble" and that rate hikes are needed to burst it. In fact, these rate hikes will only boost inflation, depress earnings, and lower the value of companies. Invariably, that's what has happened before. This isn't the first time Greenspan has destroyed investors' wealth. The stock market usually plunges when he speaks. He made similar remarks and raised rates dramatically in the months before the October 1987 crash of 30%, when nearly $3 trillion of wealth was destroyed. In December 1996 (cont)