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

To: smolejv@gmx.net who wrote (45218)	1/25/2004 8:43:12 PM
From: Maurice Winn	Read Replies (3) \| Respond to of 74559

csmonitor.com Does the Fed support the Republican presidents? I noticed in 2000 that despite a stock market which had reached the peak of its irrational exuberance and was going into crunch mode, with the prospects of a super-crunch deflationary implosion a real prospect, the Fed kept interest rates at high levels [about 8%] until the election, or more accurately, appointment of King George II was safely out of the way before they started the most dramatic interest rate cuts ever, starting with 0.5% and then regular cuts until record low interest rates were reached. Now, there are asset booms underway, the risk of deflationary cascading implosion of over-margined irrationally exuberant Biotelecosmictechdot.com investors is as dead as the Y2K bug and interest rates should be getting moved up. But it seems that's not on the agenda. China is booming, the USA is zooming, overall, the world's economy is humming along in fine form with only a few things niggling [China's banks, USA debts, chicken influenza]. I was suspicious in Y2K when Uncle Al KBE kept interest rates high. Now I'm beyond suspicious and think that interest rates will NOT be raised until King George II is safely rethroned. Therefore, we should expect a whoooppee year in assets subject to inflationary speculation and US$ depreciation. But then, the brakes will go on and those who have got borrowings will find their outgoings rapidly increasing and income rapidly reducing. Which will mean selling a few assets. Which will mean prices will drop. Maybe there will be just a touch of an interest rate rise if things go totally ape. A cage full of monkeys goes crazy if lollipops are tossed in. I've seen it! I did the tossing. The baby monkey who was handed the nearly bare handle after the big guy scoffed the lot got a taste, but that was about all. That was before zoos got all weird and stopped people feeding the animals. Most people didn't have a clue and took peanuts for the monkeys. The feeding trays were full of unwanted peanuts. We would take along silverbeet, feijoas, monkey apples, apples and the like. The cage would be in uproar with the feast. The year of the monkey could be a lot of fun. We are definitely living in interesting times. Mqurice PS: DJ, I don't think it's nice to kick monkeys. Rewarding them for good behaviour is better. A whack for bad behaviour might straighten things up, but it's no substitution for rewards. Totalitarians find the whip and the gun gets compliance, but forget that it's only the rewards which generate creative, energetic, productive, activity leading to peace, light, harmony, happiness, health, prosperity, fun and love.