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Strategies & Market Trends : The Thread -- Ignore unavailable to you. Want to Upgrade?

To: DebtBomb who wrote (30592)	1/28/2001 3:03:12 PM
From: jj_	Respond to of 49816

watch for the spin doctors to change the "layoffs being bad" to "layoffs being more productive for growth" on a dime when they feel the time is right and pour money into growth as old economy become new economy through incorporation of exponential growth in intellectual property and knowledge companies... -maybe Mr. Kurzweil(below) should stick to optical character recognition & nanotechnology but he offers some interesting thoughts on the market... upside.com U: And the implications for money and banking are …? K: The Federal Reserve really has very little control. The influence it has is really just the bully pulpit and that people think the Fed knows what it's doing. I think this concept that the economy can or should only grow 3.5 percent per year is completely outdated. The economy really wants to grow at 5 percent or 6 percent per year, and that rate will continue to grow. The model that the Fed is using is obsolete. It's based on Old Economy principles. It measures things like capital investment and energy prices, but not bandwidth or megabytes or MIPS or exponential growth in intellectual property and knowledge, which are becoming increasingly important in our economy. These factors were not very significant 10 years ago. They're now having a measurable impact. The fact is that you have price performance growing exponentially for different technologies, not just computations through Moore's Law, but every information-based technology, including communications. Mechanical systems are getting more powerful; everything is growing exponentially in its price performance. That's an extremely powerful deflationary force. And these deflationary forces are not factored into the models that the Fed uses to set monetary policy, and that's why we're not seeing inflation.