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To: Les H who wrote (4411)	12/30/2002 9:55:01 AM
From: Softechie	Respond to of 29599

*Stephen Roach: America’s post-bubble hangover remains another major impediment to a more vigorous global recovery. As I see it, until more progress is made in purging the excesses of the late 1990s, subpar growth is likely to be the norm in this post-bubble era. It’s not easy for the authorities to influence the purging process. Yet the liquidity lever is one option to do so. Long favored by policy makers as the last line of defense against deflation, there are no guarantees that liquidity injections will have immediate impacts on the real economy or on the aggregate price level. That’s especially true for a saving-short, overly indebted US economy. In fact, there’s good reason to believe that the initial impacts of an incremental liquidity injection could well be channeled into a paying down of debt and a rebuilding of savings. While that would deny the real economy instant policy traction, it would serve the important purpose of tempering the financial headwinds that are currently restraining meaningful recovery in aggregate demand. morganstanley.com