Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Eric K. who wrote (113087)	5/27/2000 11:44:00 PM
From: EricRR	Read Replies (1) \| Respond to of 1584327

central bank imposed lending rates and the common stock market indexes in Japan in 1989-1990 What have the Japanese paid for interest rates in the last decade? Something like 1%. Hasn't helped them. When the fed raised interest rates in the US in 1989, we emerged for the better. I do agree though about the inflation/oil price argument. I think inflation fighting is over rated, especially now that companies have sophisticated risk managment tools (derivatives) to control price swing risks. They don't need to raise prices during times of high price volatility. What I don't think is over rated is "cleaning out the deadwood." Using monetary policy to temper speculative bubbles is prudent, and some of the excess has been taken out of the market, and with consumer spending behavior (negative savings rate). But you're right though, just as in managing forest fires, controlled burns can take on a life of there own.

To: Eric K. who wrote (113087)	5/28/2000 10:04:00 PM
From: tejek	Respond to of 1584327

Have you seen a chart of the central bank imposed lending rates and the common stock market indexes in Japan in 1989-1990 and the US in 1928-1929? There is this peculiar correlation between a tightening policy and economic collapse. We do not, of course, know whether there is any causality here, but I suppose we can soon have three data points to show what happens when a central bank attempts to engineer a "soft-landing" to a historically overpriced stock market. Eric, There is very little comparison between Japan in 1989 and the USA in 1929. And its the lack of meaningful gov't intervention in Japan that has kept that country in recession for 10 yrs. ted -Eric