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.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (3345)	2/26/2001 9:05:27 AM
From: Hawkmoon	Respond to of 33421

I could see worrying about wage inflation if productivity were lacking. But if the fact that there are few high-skilled worker available, what are we going to do when the economy loses the "boomers" to retirement? They are a huge demographic group and as a result their retirement, a huge void of skilled labor will grow. Could part of this inflation be caused by unwillingness to increase immigration of skilled labor? Energy prices could also be a concern, but then we could growing at 3% annual growth, and an energy monopoly, like OPEC, could suck the life out of the economy by quadrupling the cost of energy unilaterally. So by raising the cost of capital through rate hikes, the Fed hopes to decrease the price of oil? Not likely... Along those lines, should the Fed hike interest rates in California because their energy is costing them more now? Or should they be decreased in order to deal with the sudden disarticulation of their economy due to the large and sudden increases in power costs? As for the wild inflation in stocks, this is certainly your most valid point. But again, it is the result of a one time event, namely Y2K, which led the Fed to aggressively increase liquidity in the MZM, and directly afterward they immediately began draining liquidity, and continuing rate hikes. So we had two major extremes that Greenspan was following over the past 2 years... massive injections of liquidity at first, followed by substantial decreases in the MZM... thus making it a forgone conclusion that a bubble would be created and then burst. I just think that AG should have began cutting in November, and ignored the election BS. The market was nervous because of that political morass and that sapped consumer confidence. And the fact that Bush was making exculpatory comments about recession (so he wouldn't get blamed), and jaw-boning AG to adopt his tax cut policies has left the Fed behind the curve. There simply has to be a better way of handling money growth. Couldn't AG have decreased interest rates for the psychological impact, but still maintained a tightness in MZM. regards, Ron