Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (238199)	4/29/2003 11:29:25 PM
From: NOW	Respond to of 436258

did his "?" key get stuck writing that missive?

To: Perspective who wrote (238199)	4/30/2003 6:44:18 PM
From: ild	Read Replies (1) \| Respond to of 436258

Fed Focus Paul McCulley \| May 2003 I Have Become An Inflation Targeter pimco.com

To: Perspective who wrote (238199)	5/1/2003 11:01:29 PM
From: Perspective	Read Replies (1) \| Respond to of 436258

I was asked for a brief summary of this article: pimco.com so here 'tis. Paul McCulley at PIMCO is interviewed, and posits that the 1980s-1990s was not just a bull market in stocks, but a bull market in capitalism in general. The 2000 bubble peak was the blowoff top of that, and now he thinks we've entered a bull market in government - obviously non-bullish for equities. The unbelievable thing in the interview is that he comes out encouraging the Fed to inflate, effectively to pay PIMCO's customers back in dollars worth far less than what they put in. Amazing! This is such a blatant breach of fiduciary duty for him to be speaking like that. He makes a solid argument - I'd encourage you to follow the link and see the graphs. If your goal is to sustain aggregate demand at present levels (ie ward off recession/depression), he makes a pretty solid argument that Greenspan should quit encouraging the private sector to load up on increasing mortgage debt, reverse course on the public sector, and encourage the federal government to begin levering up. If you believe that maintaining aggregate demand at these levels is the best thing for the economy, it's probably the right way to go about it. It says to stop lowering rates, and for the government to start borrowing money. My comment - this does nothing to solve the enormous trade imbalance, and the dollar collapse that is looming. If you could figure out a way to fix the trade imbalance without cratering demand, you might actually have a reasonable way out of this whole mess. But I haven't seen anything remotely like that. Have a peek at the graphs - they speak for themselves. BC