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To: flyboy who wrote (53924)	1/4/2001 10:11:19 AM
From: LLCF	Read Replies (2) \| Respond to of 436258

<While you may well disagree with the point I can back it up. > Your assertion that ATT having financial troubles = tighter Fed policy is falacious IMO. Have you seen the money supply numbers?? Monetary policy is tied to Money Supply no? <The tightening of funds has caused a sharp decrease in productivity as new technology has seen available capital diminish substantially…> I think you are arguing that productivity due to technological advances will [has?] slowed due to lack of capital available to the sector. Certainly you're not saying that there has been a technological retracement [reversal of advances previously made]?? Once something is discovered it's usually not put back into the bottle. DAK

To: flyboy who wrote (53924)	1/4/2001 10:28:13 AM
From: Cynic 2005	Read Replies (2) \| Respond to of 436258

<<The reason that we did not have inflation during previous years under looser monetary policy is that productivity gains were able to overcome the looser monetary policy (not unlike Japan) as I had used in my earlier example…>> This all baloney! This crappy argument is given by the vested interest groups (Fed is one of them) to fool the ignorant massess. The simple reason inflation was not a threat was that there is too much over capacity. The very productivity gains you are talking about are available to you and your competition, which doesn't put you at any advantageous position over your competition. There are always exceptions but it will be nearly impossible for technology driven productivity gains to tame inflation. If the supply and demand picture has an imbalance towards demand side, you will have no inflation. Not when consumer has abundent choices.

To: flyboy who wrote (53924)	1/4/2001 4:57:15 PM
From: UnBelievable	Respond to of 436258

Interest Is The Price Of Money If the money supply is managed so that it grows at the same rate at which the economy is growing, the result is stability in present and future purchasing power. That situation results in the lowest total cost of interest for the economy, since lenders do not need to add a risk premium associated with possible future devaluation of the dollar at the time it is repaid. The rate of interest is then determined by the market place. The result is efficient allocation of capital to those enterprises that are able to generate the greatest return. This also is in the best interest of the economy. When the government intervenes in the capital market by increasing the money supply faster than should be case to achieve the objective on an artificially low interest rate the result is that borrowers who are not actually able to employ capital so as to generate the rate of return associated with its real cost, are now able to borrow. Since the economies pool of capital at any point in time is fixed any mechanism which allocates this capital other than on a market determined basis will result in the rate of return on the scarce resource, capital, being lower than its true cost and value. The allocation of any type of resource based on anything other than market factors compromises the very essence of the underpinnings of the capitalist economy. Whether the excess money is created prior to the capital allocation process or in an attempt to protect an enterprise from defaulting on loans because their business model has not worked the result is the same, mal-investment. The after the fact Monetizing of losses associated with bad loans is especially troublesome since it relieves the lender of the necessity to be diligent in the decisions they make concerning how they loan their money. Bad loans are a part of lending. Reimbursing lenders for this legitimate business expense constitutes a government subsidy, which also is a significant compromise to the capitalist model. Much like Democracy, Capitalism is not perfect. But it is clearly more efficient than any of the alternatives including the one being practiced in the US, which is a nominal capitalist economy with significant central government planning and intervention.