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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Bill/WA who wrote (247684)	6/30/2003 6:14:58 AM
From: UnBelievable	Respond to of 436258

Bubbles Can't Break The World Just the people "If it can break, let it break"

To: Bill/WA who wrote (247684)	6/30/2003 10:45:47 AM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

The increased future pension liability resulting from lower assumed rates is the most clear example of unintended effects of lower rates. Personally, I see increased risk aversion as an additional effect. As retirees realize less income from a pool of savings, they see they must dip into their capital (eat their seed corn). Thus contemplation of capital losses are more difficult to bear. You may get this manic/depressive dichotomy- where money is worth nothing (in terms of income generation ability) so may as well spend it now; but then again, $20 is much harder to create now than 3 years ago, so must be very careful of how each dollar is spent. This almost mirrors the hyperinflation/deflation dichotomy. Clearly, intersting times. Has anyone said this may end badly?