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To: Lizzie Tudor who wrote (151210)	1/1/2003 11:01:43 PM
From: BGR	Read Replies (1) \| Respond to of 164684

BTW, The only solution in my view is the Fed aggressively monetizing the public debt, and when done then buying some State Govt issue bonds to support the budget deficits for the respective states. That is, it should print money to buy back bonds, and not issue new bonds in its place. That's the only way to provide the inflationary balance to the present deflationary trend. Greenspan raised rates in 1999-2000 when there was not a whiff of inflation. Immediately, the economy went into the deflationary cycle, and for a leveraged economy deflation is poison. The present situation IMHO has absolutely nothing to do with the stock market bubble - it has simply to do with the fact the Feds raised when they shouldn't have. Lowering afterwards is like killing the patient first and then providing oxygen. Didn't work too well in Japan, where also the Central Bank raised rates to prick a asset price bubble. That, BTW, is totally outside the charter of the Fed to control. It's realm is CPI, and CPI being tame, needless mucking around with the interest rates was categorically stupid, and the price is being paid now.