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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (39774)	10/18/2003 12:53:17 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

ACF, I'm getting 1% on my money. That's simply not enough. People will not save. Even with the low risks of today. Interest rates will go up as people abandon holding cash, which is exactly the process Uncle Al intended to force onto people = don't just sit on the money, because he planned to cut your income to near nothing, so get out there and spend it and invest it in something, anything. So it has come to pass. Now, it's time to start gently raising rates again to avoid inflationary pressure. Having China underpin the ability to expand the money supply dramatically was very convenient. I don't agree that 2010 will be the end of the great prosperity boom. Sure, the baby boomers will be busting, but I've already busted, with empty nest syndrome cutting our spending by heaps. On the other hand, the offspring of the baby boomers are off and running and increasing production and don't forget the billions of non-baby boomers in India, China and everywhere else who want a piece of the action and have horizons far beyond 2010. Nobody is worrying about a deflationary implosion now. They are lined up with their gold, hoping for dramatic inflation. It's time to punish them and chase them out to do something useful instead of trying to create a gold economy, like the Easter Island economy of useless heads facing out to sea to ward off evil spirits or something. Digging rocks or gold is not a useful way to pass the day. Mqurice

To: AC Flyer who wrote (39774)	10/18/2003 2:37:56 PM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

Hi AC: just musing ... in any case not picking a fight, OK;? >>the fact that J6P can get a 5% 30 year mortgage is not his doing - it's the rational work of the private sector<< I'm somehow used to the idea separation of duties, with the central bank creating / controlling the creation of money, and financial (your private) sector getting paid to do the rest. This just does not seem to have been the case with GSEs creating money out of thin air, putting some lipstick on it and selling it. How much could Fed do (or was ready to do)... I probably sound like an old record, but besides stepping on the rates with both feet and finding some reasons for doing it, not much - of course, I admit here the inherent chicken and egg problem... but the image of the Wizard of Oz un-curtained toward the end of the movie is floating in my mind. Somewhere at the bottom of some spreadsheet in my head low interest rates mean to me no incentive to save, mean low risks, mean either some thermodynamic winter like Japan or yet another round of carry-trade- or debt-based bubbles... Low rates have a feel like a cut on the insurance policy ("you'll be paying just half of what you used to and we'll add your two youngsters at N/C as well"). End of rambling RegZ dj