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

To: GraceZ who wrote (2327)	6/10/2003 2:03:38 PM
From: Perspective	Read Replies (1) \| Respond to of 4905

I really want to understand your belief that the Fed will not move to "unconventional" money supply measures. I agree that they aren't there yet, because they aren't quite out of conventional weaponry. Once they get to zero on Fed funds, though, do you think they won't make good on threats to resort to unconventional measures? BC

To: GraceZ who wrote (2327)	6/10/2003 2:05:22 PM
From: Perspective	Read Replies (1) \| Respond to of 4905

Japan is truly different, in that they are a much smaller portion of the global economy, an exporter, and a nation of savers. They print money, but it just flows elsewhere. When you are a small fraction of the world economy, that can happen. When you get the vast majority of the central banks applying the same strategy, it will be a different story. The money won't go run off to the planet Pluto; it will raise global price levels. As you correctly point out, the deflation threat is still rather imagined. I think it's being thrown out there as a cover so that the Fed can hack away at the debt mountain at the expense of creditors, much as monetarism was an excuse for raising rates at the end of the 1970s. BC