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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (1986)	5/28/2003 11:43:16 AM
From: GraceZ	Respond to of 4912

If the Fed were holding a negative real rate in a situation where we had demand for loans it would be a problem. All the growth in the monetary aggregates can be attributed to growth in the mortgage market. Money is flowing into money market accounts for .7% interest and into real estate which, as I've said before is a dead loss, a zero sum game. It has no multiplier effect. There is only so much you can do with monetary policy. What we needed and what we got (although not as big as it needed to be) was a decrease in taxes. You can't have tight fiscal policy (as in high taxes) and loose monetary policy and expect that the money created will be used for productive assets.