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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (34228)	3/20/2001 5:33:10 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 65232

yes, rates offset rising money supply unfortunately, the money supply did nothing to build up the economy it found its way into stocks, i.e. shorterm assets but rising rates undercut the economy, i.e. cost of capital so now... keep money supply pumping away, to forestall a bond market collapse i.e. rising interest rates from lack of bond buyers and reduce interest rates but the negative momentum will continue for a while longer in economic contraction I dont know how long when will the Federal Reserve learn that a little inflation is extremely healthy for the economy ? gradually rising real estate is good gradually rising incomes is good when will the Fed learn that deflation, even a little, is DEVASTATING ? it will destroy banks and capital markets I do know that the Fed has NOT caught up much the 3-month TBill yield has dropped 70-80 bpts since Christmas the Fed is now now now hitting the brakes by 60-70 bpts FedFundsRate is 5.0% 3-mo TB yield is 4.3-4.4% the economy will continue to slow what the Federal Reserve is missing now is a huge structural change THE ECONOMY GROWS AND CONTRACTS MUCH MORE RAPIDLY THAN 5-10 YEARS AGO GreenShit wanted to prevent a Japanese Bubble Burst scenario so he created an American Bubble Burst scenario nothing was learned from history except he is REFLATING, whereas Japan has not Japan still steadfastly refuses to sharply increase money supply they are down to zero percent interest rates how EFFING clueless can they be? the Japanese cultural error is to encourage savings until the economy stagnates, to avoid debasing the currency until deflation ravages your banks the American culutural error is to control until your economy and its citizens die of financial manic depression I rant, and wear myself out / jw