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

To: LLCF who wrote (14230)	1/30/2002 10:07:43 AM
From: smolejv@gmx.net	Respond to of 74559

from the first ref: >>Thus, it is entirely legitimate for the Fed to redistribute income between the lenders and borrowers of cash<<... current account included dj

To: LLCF who wrote (14230)	1/30/2002 10:32:41 AM
From: AC Flyer	Respond to of 74559

Government is doing what it should do in a recession, creating demand. The demand is real, despite the fact that the economic output wound up in smoking craters in Afghanistan. The current administration shows every sign of advocating significant increases in defense spending, which will also add to final demand. This will have the effect of cutting the trough out of this downturn, which it appears to have done in 4Q, '01. Businesses have been managing inventories downward at an unprecedented rate. This inventory depletion will be the cause of a strong rebound, imo. "A jump in government spending and a rush by consumers to take advantage of zero-percent financing for purchases of new cars powered the fourth quarter GDP. Amid the strong consumer spending, companies ran through a whopping $120.6 billion worth of inventories, the largest drop on record."