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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (15045)	6/8/2004 10:02:08 PM
From: NOW	Respond to of 110194

"Oh, you guessed it. Chart 4 is different from the other three charts. In the Euro-zone, Japan and the UK, the monetary policy interest rate is above the inflation rate (if only slightly in the Euro-zone). But in the US, the fed funds rate target is 71 basis points lower than the inflation rate. In the 1970s, the Fed held the funds rate below the inflation rate for extended periods of time. That led to accelerating inflation and the call for the Red Adair of inflation fighters, Paul Volcker to put the inflationary fires out. Greenspan had better get on with his “measured” (whatever the heck that is) interest rate increases or we will have to call Volcker out of retirement. If Greenspan lollygags and other central bankers continue to act responsibly, then the implications for global inflation will be less than they were in the 1970s. But the US dollar will crash as US inflation escalates."