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

To: NOW who wrote (2858)	6/30/2003 10:12:43 PM
From: GraceZ	Read Replies (2) \| Respond to of 4907

If you (you in a collective sense) really believe that the Fed can control interest rates both long and short to the exclusion of any free market vestiges that exist then I can honestly say they just might have a job for you there at the Fed. They can't get ahead of the market. What we have is called marginal supply regime. Marginal supply is greater than marginal demand at any price level. This problem arises from failing to totally let the market determine the equilibrium rate. In normal market discovery, the market moves from one extreme to the other in search of equilibrium. The market has to discover the point at which it has gone too far in order to reverse. You see this in stocks every day, it's the same thing with the price of money but we don't have a free market in money or at least this is what everyone believes apparently, that the Fed sets the rate. We live in a country where most knowledgeable people can explain that you can't "fix" the price of anything, yet we have a whole lot of people who apparently think that the price of money is now fixed by the Fed.