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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (6570)	5/18/2004 9:20:01 AM
From: valueminded	Read Replies (2) \| Respond to of 116555

Earlie: I think you are correct in part of your assessment. I think with Greenspan at the helm, deflation is not a possibility. (ie it is easier to print money then to manufacture goods) Deflation will only be possible if we get a FED (ie if Voelker was in now) that decides interest rates are too low. I view that as unlikely. Furthermore, selling short term bonds wont be a problem which is what the government will do. They are not into long term so I think they and the Fed are aligned in that respect. Ie Print more money to chase the bonds, issue the bonds to capture the money stream. Everyone is happy. Inflation is the eventual endgame imo not deflation. Deflation would only be possible if money supply was constrained by artificial means (such as gold) or by a population which prefers to save not spend (aka Japan) Besides, inflation makes homeowners (read powerful voting block) happy. Deflation does not. For a while I thought that Greenspan was a little to free with the money press, but I am wondering if maybe I was wrong and he actually is the right man for the job. Just my off the cuff thinking.