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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (15228)	12/2/2002 3:03:10 PM
From: ahhaha	Respond to of 19219

I guess since the fed can and does intervene occasionally is an easy segway into the "they're heeerrrreee" thinking. That kind of intervention has no lasting consequence because all the spent ammunition is sterilized. That means neutralized. Also, it's important to understand when FED does intervene. In the last 10 years FED has only intervened in the currency markets twice. Otherwise, it hasn't intervened at all in any but the money market. There's another kind of intervention. FED intervenes in the money market almost daily as part of fixing the fed funds rate. That is to be distinguished from the intervention claims of the PPT myth makers. My belief is that when the fed does prop up the mkts it hits the news, which as you say is deliberate because it is mostly a psycological measure. You have to understand that FED does not prop markets. They only try to slow the instantaneous rate of change of price, and I want to emphasize "instantaneous". The fact is that FED can't do any more than that. With all of its resources the FED can't effect the changes the myth believers think they can. It's worse than that and was proven so in 1979 when FED tried to slow down the rate of increase of interest rates by creating fiat money. The effort only caused rates to rise faster because the players, the lenders, could see that FED's action would only throw gasoline on the fire, and refused to lend. The lenders refused to lend because they would be returned what they lent at reduced value through the effects of monetary assisted inflation. So FED has practical and theoretical limits to what they can do.