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

To: TobagoJack who wrote (26369)	12/19/2002 9:48:51 PM
From: elmatador	Respond to of 74559

"If deflation were to develop, options for an aggressive monetary policy response are available," Greenspan said. Does he means he will crank up the guitarra? Note: The biggest three economies in the world at the same time in trouble. I bet you a round of Heinekens that, German public workers will leave three-day pile of uncollected trash in Munich -press will cry Chaos!!- and the government will -promptly- give then 2% salary increase, and will increase taxes to pay for it. We know the script. An inch more towrds abyss. Greenspan says economy working past "soft patch" 20 December, 2002 10:11 GMT+08:00 By Glenn Somerville NEW YORK (Reuters) - Federal Reserve Chairman Alan Greenspan said on Thursday there was no reason to fear the United States was at risk of price deflation, and recent evidence showed the economy was working past a soft patch. "The United States is nowhere close to sliding into a pernicious deflation," Greenspan said in prepared remarks to the Economic Club of New York. If a widespread decline in asset and other prices did develop, the U.S. Fed chief said policymakers had ample tools to fight it. "If deflation were to develop, options for an aggressive monetary policy response are available," Greenspan said. Some economists have expressed concern the U.S. could fall into a deflation cycle like the one that has bedevilled Japan's economy in recent years. Greenspan was cautiously upbeat about the economy's prospects, especially since the U.S. central bank cut interest rates by a half percentage point on November 6, bringing its federal funds rate to a four-decade low 1.25 percent. SIGNS OF PROGRESS "The limited evidence since the November easing has supported our view that the U.S. economy has been working its way through a soft patch," Greenspan said, echoing a view he expressed before Congress last month. He conceded the downturn was extensive -- "the patch has certainly been soft"-- and the job markets remain "subdued", and a pickup in business investment awaits fatter profits. Still, Greenspan said, low interest rates and rising rates of productivity were helping support economic activity. Without directly mentioning Iraq, Greenspan said a recent rise in "geopolitical risk" was putting a damper on demand and suggested that a resolution of it would play a significant role in stimulating a brisker pace of expansion. "Any significant fall in the current geopolitical and other risks should noticeably improve capital outlays, the indispensable spur to a path of increased economic growth," he said. BUBBLES HARD TO DETECT Greenspan returned to a theme he addressed last summer -- whether or not the Fed should have been more alert to the risk of the "bubble" that developed in U.S. stock prices in the 1990s, so the aftermath of the collapse in prices after March 2000 might have been less severe. Trillions of dollars in wealth was lost when stock prices tumbled, prompting criticism of the Fed for failing to do more to prevent it. As he did before, Greenspan insisted "whether incipient bubbles can be detected in real time and whether, once detected, they can be defused without inadvertently precipitating still greater adverse consequences for the economy remain in doubt." He said it seemed "improbable" that another bubble might develop soon, since investors now were sensitive to the necessity that asset prices are backed by earnings. Since October, Greenspan said, conditions in the nation's financial markets were improving. "The overall cost of business capital has clearly declined, inducing in recent weeks increased issuance of bonds of all grades and halting the runoff in commercial paper and business bank loans," he said. He said there are signs of "some stirring in capital investment" necessary for a vigorous recovery, but it was too early to judge them. There was no question that companies still have trouble raising prices and keeping them higher, Greenspan noted.

To: TobagoJack who wrote (26369)	12/19/2002 10:02:46 PM
From: elmatador	Read Replies (1) \| Respond to of 74559

pressure on China to strengthen its currency to help U.S. manufacturers U.S. mulls pressing China to strengthen yuan 20 December, 2002 09:49 GMT+08:00 By Adam Entous and Anna Willard WASHINGTON (Reuters) - Some of President George W. Bush's aides are considering stepping up pressure on China to strengthen its currency, which would help U.S. manufacturers, but the effort could be scuttled by others in the administration who oppose taking an active role in currency matters. asia.reuters.com <<I thought buying UAL planes and Global Crossing would be enough!! Pretty soon the AFL-CIO, the Unions of Germany and Sweden will be inviting some worker class -potential- hero to teach him to defend workers 'rights'. Things like 35-hour week. 'Sick' leave. Paternity leave and 36 days of holidays per year. The ignorant mass will buy it 'con gusto' Then this workers class hero return to China and raise the workers unions and stop the economic growth. Years later this working class hero will become president of a China completely Kaput!! His Name may be the Chinese equivalent of Luis Inacio Lula da Silva, Brazil's new president. <ggg> We know the script!!>>