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.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (133686)	11/9/2001 12:09:39 PM
From: sun-tzu	Read Replies (1) \| Respond to of 436258

<First, an economy dealing with the aftershocks of an asset bubble is typically less responsive to lower interest rates. Second, for a country with a strong currency, export weakness is a given in a synchronous global recession -- irrespective of the level of short-term interest rates. Third, the quick response of the "refi-cycle" may have shortened the lags of the monetary policy transmission mechanism, suggesting that there may be less demand stimulus in the pipeline than widely perceived. Fourth, any whiff of deflation -- now a distinct possibility, in my view -- could deaden the economy’s sensitivity to lower nominal interest rates. Fifth, a possible downshift in trend productivity would impair the economy’s flexibility, probably making it less responsive to cuts in interest rates.> I am still amazed that people are not more cautious given what Roach eloquently stated above. Viewing the Fed as a panacea for economic ills is remarkably short-sighted.