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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (63645)	2/12/2001 11:04:34 AM
From: Alex	Respond to of 116753

<<It is worse than that, by which I mean the Fed caused BOTH a contraction and a deflation. By raising interest rates unnecessarily when long-term interest rates were already lower than short-term interest rates (the "inverted yield curve"), the Fed slowed the real economy, bringing about the contraction from the higher growth rates the economy had been enjoying. At the same time, by not supplying sufficient monetary reserves to meet the legitimate demand for money by American enterprises and households, the Fed also caused the deflation we see evidenced by the declining gold price. The contraction part can be overcome by lowering short-term interest rates or cutting marginal income-tax rates and capital-gains taxation. The deflation part of the problem can only be rectified by having the Fed add sufficient liquidity to cause gold to climb back over $300. Otherwise, there will be an slow, grinding, downward adjustment of all dollar prices -- the mirror image of the slow, grinding upward adjustment of all dollar prices that we knew as the inflation of the 1970s.>> polyconomics.com