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To: 4figureau who wrote (4573)	5/29/2003 12:03:25 PM
From: Jim Willie CB	Respond to of 5423

an analogy in a microcosm to illustrate Fed Policy a clip from my next article just submitted Analogies are difficult. Imagine in a tiny village an orchard of giant orange trees whose branches have grown too much without pruning for two decades, fed by real and artificial sunlight, natural and hydroponic watering, plus miracle-grow supplements. Tree branches have extended in sprawls to such lengths that many bend to the ground from their own weight, in grotesque fashion. The abundance of fruit produce has overloaded supply, bogging down fruit stands selling on the roadsides. The farmer becomes confused, observing in dismay fallen prices. He is unable to perceive that supply is excessive, having learned that growth is good. His bank has cheered him on, lending money as business grows, and worker payrolls expand. He seeks out counsel from the brain trust at the farm board. The experts tell him that orange demand is lacking and must be encouraged in order to firm his orange prices. The solution is handed down: doubled water supply from more water hoses, round-the-clock sunshine, more fertilizer, all of which will stimulate demand. The end result curiously turns out to be a rise in the principal value of mortgage bonds that back such bloated farm groves, and rising property values for the homes of their farm workers. Such is the utter insanity of Greenspan and the US Federal Reserve. Culling some branches, laying off workers, reducing production, scaling back the nutrient systems, these are unacceptable. / jim