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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (40088)	5/19/2003 10:04:35 AM
From: Jorj X Mckie	Respond to of 57110

Personally, I am short the USD ever since Fed governor Bernanke's November 2002 speech where he went to pains to explain just what printing money does to the value of a currency for those willing to listen.... though there was lip service to the strong dollar, there were other more statements and actions that made it clear that the strong dollar policy was a thing of the past. Frankly, I prefer a more honest approach, but I don't expect that from the government...any government. Paranoid? I think that the economic policies in the past 10 years have been downright reckless. I'm most familiar with the U.S., but we weren't alone in this. And it isn't confined to the period when there was a democrat in the white house. The Fed policy in the past couple of years has been unimaginative and dangerous. By unimaginative, I mean that we basically did the same thing that Japan did. The best thing that the gov't/Fed could have done is to let the bubble deflate on its own without intervention. It would have been fast and furious and it would have hurt, but it would also be done by now. Instead, I fear that this could be prolonged significantly by the continued intervention. But back to Treasury Secy Snow, that is why his policy gives me hope...finally someone is letting the market forces do their job.

To: zonder who wrote (40088)	5/19/2003 10:16:12 AM
From: GraceZ	Read Replies (1) \| Respond to of 57110

the deeply negative interest rate is a perverse inventive to move into riskier assets and not lose money after inflation. Bingo. Its designed to get people out of safe and to engage risk. Perversely people seem to be content to sit on huge sums at .7% interest nominal, money is still piling up in money market funds. They are resolving their need for income by bidding up the bonds, a strategy which has to blow up at some point. Unfortunately this is what comes of trying to use monetary policy to the exclusion of fiscal policy. It is fiscal policy which sets up the conditions for real growth in the economy.