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

To: glenn_a who wrote (8098)	6/20/2004 2:12:50 AM
From: Kailash	Read Replies (4) \| Respond to of 116555

Thanks, Glen -- I'd never seen this: "American support of the pound sterling in 1927 implied low rates of interest in New York in order to avert big movements of capital from London to New York. The Federal Reserve Board accordingly promised the Bank of England to keep its rate low; but presently America herself was in need of high rates as her own price system began to be perilously inflated (this in fact was obscured by the existence of a stable price level, maintained in spite of tremendously diminished costs)." A fascinating antecedent twist to the current relationship between Japan and the US. The key dynamic appears to be an urge to keep interest rates low as the debt burden grows, unnoticed because inflation is masked by surplus production. It's like a slowly loading gun. Cheers, Kailash