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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Dave-in-MarinCa who wrote (7695)	8/1/2000 1:33:32 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

<<Don't they call that stagflation when new orders and production are falling and prices are rising?>> That's what they call it, alright.... <<And what's a central banker to do??>> Be afraid. Be VERY afraid.... Really, all the choices are bad (as Bill Gross described it on CNBC 04/14 "The Fed is in a box"): 1) Leave things alone, let inflation build up to a clearly intolerable levels, get tossed out of office, retire in disgrace... 2) Raise rates, bite the bullet, induce a recession (in this case, more likely a crash landing than a soft landing). This was what Volker was hired to do and did well circa 1980. Since it would now widely be perceived to be the fault of the Fed, in Al.com's case: get tossed out of office, retire in disgrace... 3) Lower rates, reinflate. Pray that the subsequent Hindenburg-esque bubble explosion doesn't precipitate the worst worldwide economic calamity since the Great Depression. Risk 1980's style-South American hyperinflation in the meantime. Watch gold go to $2500/oz before private possession is outlawed by the Federal Government. Get run out of office by vigilante mobs, and if lucky, escape with your life and retire in disgrace... BUT: there's a good 401K and medical, I understand....