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.

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

To: Zardoz who wrote (69106)	5/13/2001 5:39:30 AM
From: d:oug	Read Replies (2) \| Respond to of 116764

For a thief and a crook an end "to be gained" justifies any means.eom

To: Zardoz who wrote (69106)	5/14/2001 11:56:22 AM
From: Rarebird	Read Replies (1) \| Respond to of 116764

On the subject of motives, by now, Greenspan's policy should be obvious. He has not only cut interest rates four times, he has also flooded the U.S. economy with new money -the U.S. M-2 is climbing by 13.6% per annum. Today, Alan Greenspan is doing the exact opposite of what Paul Volcker did a little over 20 years ago. Volcker had an alternative - money quantities or interest rates. Mr Greenspan has NO alternative. For years, the Greenspan Fed has pushed the notion that lower interest rates are a complete policy panacea for ANY problem which might beset the U.S. economy. If the Fed were to do now what the Fed did in 1979, the shock would be gigantic. The U.S. M-2 would start to decelerate from its present 13.6% annualised rate, and shortly after that, U.S. market rates of interest rates would explode upwards. When market rates of interest are below the rate at which money creation (+13.6%) is taking place, then interest rates are being held down artificially because they do not reflect the rate at which new money is being created. This is true even when official interest rates are rising, as they were in the U.S. in late 1999/early 2000. Then, as now, new money creation was accelerating in the U.S. Only when there is NO money creation and NO interest rate manipulation will rates reflect the real economic situation and also the real relationship between savings and investment. Greenspan can neither stop manipulating interest rates nor stop increasing money quantities. If he did, on the economic side, the real U.S. economy would tumble into a recession that would put all post-war recessions in the shade, consigning them to footnotes in future history books. On the financial side, U.S. stock markets would CRASH and the destruction of wealth-on-paper would be horrific. On the political side, the fallout from the economy and markets would destroy the U.S. political Establishment. Greenspan knows all this. He is desperately trying to INFLATE his way out of his problem. What makes You think that Greenspan will be successful here? Don't you know that Inflations Always Boomerang? If the Fed's money creation does manage to finally hit corporate coffers, the newly created money has to arrive there and have effect before all these U.S. corporations have to show up and report on their next quarterly earnings. If Greenspan's current money creation arrives too late or in too small a degree, U.S. corporations will again report low (or in many cases no) earnings. If that happens, U.S. (and world) stock markets will be in even more trouble than they were in March. Got Gold? Got Guns? Got Guts?