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

To: Elroy Jetson who wrote (24195)	1/7/2005 9:06:51 PM
From: Tommaso	Respond to of 110194

>>>You were a good boy and believed everything the magicians at the Fed told you. <<< If you could see my posts for the last five years you would see what an incredibly foolish and insulting statement that is. There is little possibility for informative discourse with that kind of contemptuous and scornful (and very stupid) commentary. The interest rates set by the Fed immediately affect the level of interest rates throughout the banking system. The control of the money supply is much more complex. I have been following the money-supply figures for about a quarter of a century, originally having to calculate them myself, and then discovering the publications of the St. Louis Fed. But really, there is no point in wasting time trying to carry on a reasonable discourse with a mean-spirited ignoramus like you. >>>The interest rate for money is set by supply and demand, regardless of what incantations the Fed may utter. There is no getting around this fact.<< The grain of truth in this statement is that because of the irresponsible management of the federal budget, and because of the huge trade imbalance, the demand for U. S. government securities by foreigners may well fall off, and at that point the Treasury will have to raise interest rates in order to roll over the U. S. government debt. But that has not yet happened, and at the present moment the Fed is in fact choosing to raise interest rates a step at a time. At some point it will probably get out of their control, but it is always possible for a central bank to choose (as Volcker's Fed did, and as even the Turkish national bank seems to have been able to do) to raise interest rates high enough to regain control of the value of the country's money. I have been intensely skeptical of everything the Fed has said and done for the last ten years; I think that Greenspan has betrayed every conviction that he originally held. It is a strange irony that I must listen to a ninny like you saying "You were a good boy and believed everything the magicians at the Fed told you."