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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (2559)	6/6/2003 5:30:55 PM
From: Lone Ranger	Respond to of 10065

Wallly <ggg>, Sounds just like the company I work for<gg>.

To: Wally Mastroly who wrote (2559)	6/9/2003 1:42:44 PM
From: Boca_PETE	Read Replies (2) \| Respond to of 10065

Japan Weighs Radical Deflation Therapy forbes.com TOKYO - Japan is considering taxing all cash and savings in an effort to force its people to spend their money or lose it, according to Shukan Gendai, a leading Japanese newsweekly. --------- It is UNBELIEVABLE and OUTRAGEOUS that such a measure would even be considered by a "government" IMHO. P

To: Wally Mastroly who wrote (2559)	6/9/2003 5:26:08 PM
From: Wally Mastroly	Read Replies (1) \| Respond to of 10065

Fed Deflation Fighting Tools May Not Work Monday June 9, 3:48 pm ET - Reuters By Tim Ahmann WASHINGTON (Reuters) - Concerns over the effectiveness of untried deflation-fighting tools may make Federal Reserve officials more willing to cut interest rates even if the economy looks set to brighten, economists said. ADVERTISEMENT In public, policy-makers have bravely outlined steps they could take if they could no longer lower overnight rates and had to combat a debilitating fall in consumer prices. Some economists say this outward confidence belies private worries over how well "unconventional" weapons in the Fed's arsenal, like buying long-term Treasury bonds, would work. "The Fed is more concerned than they want to let on publicly," said Doug Lee, president of consulting firm Economics from Washington. "They are trying to reassure people and that's appropriate, but their ability to control things is not quite as strong as this discussion suggests." Any secret misgivings will be on the table on June 24-25, when Fed policymakers gather to decide whether to take out more rate cut "insurance" against a deflation risk that most officials consider quite small. Fed Chairman Alan Greenspan set the stage for the debate in Berlin last week in a speech that touched on the central bank's lack of deflation-fighting experience. "As a consequence, in one sense, we need a much wider firebreak, in logging and forestry terms, because we know so little about it," he said. "So, we lean over backwards to make certain that we contain deflationary forces." Most market participants took his comments as a sign the Fed would lower overnight rates, now at a 1961 low of 1.25 percent, to a level not seen since 1958. DEJA VU The June meeting will not be the first time the Fed has fretted about the nightmare scenario of an interest rate at zero and prices falling. Concerns the Fed could run into "difficult policy implementation problems" figured into the calculus in November when the Fed whacked a half-percentage point off rates to ward off deflation, according to minutes of the meeting. Deflation concerns also animated the string of 11 rate cuts the Fed made in 2001 -- one of the central bank's most aggressive campaigns ever against economic weakness. When Fed officials gathered in January 2002, there was a feeling the economy -- still standing after the devastating Sept. 11 attacks -- had dodged a bullet. With the federal funds rate at a four-decade low, the discussion touched on ways the Fed could combat weakness if it ran out of room to reduce overnight borrowing costs. "Under such conditions, while unconventional policy measures might be available, their efficacy was uncertain," minutes from the Jan. 29-30, 2002, policy session state. While several officials have been heartened by signs hinting at an economic pickup, some find it hard to entirely shed the deflation fear, since the costs could be crippling. Johns Hopkins University professor Laurence Ball last month called the Fed's options "speculative and unproven." "These things wouldn't be too effective unless they were carried out on a really massive scale," he said. "Then I think those huge operations raise other kinds of problems that are hard to calibrate." Still, Fed officials stress they face no limit to the amount of money they could pump into the banking system. Lee said while that assertion is correct, officials have not said how they could force credit out of the banks and into the economy. "They still might not be able to influence the economy in the way they would prefer," he said. "That's a place that none of us want to go."