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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (3084)	4/18/2001 11:55:05 AM
From: tradermike_1999	Read Replies (3) \| Respond to of 74559

What got the scared crow so scared? That is the 60 dollar question.... It takes 6 months for interest rate effects to filter into the economy and then a 6 months afterwards for that to start to effect consumer prices. What will happen a year from now when Greenspan starts to get scared of inflation and raises interest rates. Hyperinflation of the money supply is not a good thing in the long run. What you want to see is stable and steady economic growth. If you look at the history of the US economy this has been achieved when the Federal Reserve has done little. Times when the Federal Reserve makes wild swings in interest rates have been characterized with horrible busts. Greenspan lowered interst rates in 1998 in a panic, then raised them in 1999, and now is hyperinflating the money supply like has never before been seen. This is the most votatile interest rate policymaking that the US has seen in decades. If Greenspan screws up again and has to raise rates next year than this economic slump will last for years instead of months. Lets cross our fingers and hope he gets lucky at his interest rate daytrading.