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

To: mishedlo who wrote (21761)	1/19/2005 2:33:06 PM
From: Tommaso	Respond to of 116555

I wish the U. S. could export a few million rednecks to make room for more intelligent (and polite) Asians, myself. Of course I ought not to say that. Some of my best friends are rednecks.

To: mishedlo who wrote (21761)	1/19/2005 2:37:42 PM
From: RealMuLan	Read Replies (3) \| Respond to of 116555

-ggg--"A higher birthrate breeds social security success" 20.01.05 NEW YORK - Tara Trent of Lake Geneva, Wisconsin, has three girls, with another child on the way in June. The housewife, 31, and her husband, Ken, talk of having a fifth baby. Big families aren't unusual in the neighbourhood, she says. "Ken says we're not going to have any workforce later," Tara says with a laugh. "So we've got to pump these kids out to take care of us." The Trents are part of a demographic phenomenon in the US unmatched in any of its major trading partners: Americans are having more babies. That trend, combined with an annual inflow of immigrants that is more than the rest of the developed world combined, is undercutting President George W. Bush's argument for reforming the social security system. He asserts that the current system faces an emergency because of a sharp decline in the size of the future US workforce. nzherald.co.nz

To: mishedlo who wrote (21761)	1/19/2005 3:45:54 PM
From: CalculatedRisk	Respond to of 116555

MUCH MORE FED talk today: All is well. Inflation is under control. Growth is now sustainable. The deficits (fiscal and current-account) are a concern. Expect more rate hikes ... Ben Bernanke federalreserve.gov Timothy Geithner newyorkfed.org Sandra Pianalto clevelandfed.org Apparently Anthony Santomero (Philadelphia), and Gary Stern (Minneapolis) also gave speeches today (no links yet). And the USA today story: Fed choir sings praises of action balancing rates, inflation risks By Sue Kirchhoff, USA TODAY WASHINGTON — Federal Reserve officials said Tuesday that the economy has reached a point of sustained growth, with rising employment, requiring it to keep raising interest rates to stave off possible inflation. In a series of speeches, Fed officials said inflation appears tame, but added that as the economy gains solid footing they will be vigilant in looking for price pressures or what Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, called "the possibility of inflation creeping in." Pianalto told a Pittsburgh group that concern about falling prices, which prompted Fed rate cuts well into 2003, has dissipated. Now, the Fed must anticipate the potential for rising inflation and defensively raise rates to a neutral level that doesn't overheat the economy. "Recognizing how difficult it is to know when policy is truly neutral, I think it is prudent to move (interest rates) up to a position that gives me more confidence that monetary policy is no longer accommodative (to support growth)," Pianalto said. "I would prefer this strategy to finding out the hard way" that inflation had jumped. Pianalto said core inflation, which doesn't include food and energy, remains low and wages are contained. But she said the expanding economy should increase demand for credit, raising market-based interest rates. Large U.S. budget and trade deficits could pressure financial markets. The Fed has boosted the federal funds rate, the amount banks charge each other for overnight loans, five times since June, taking it to 2.25% from 1%. Fed policymakers meet again Feb. 1-2. In separate speeches other Fed members seemed a bit more sanguine, saying they expected the Fed to continue raising rates at a measured pace. Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, said the country was in a sustained expansion with tame inflation. He predicted growth of 3.5% to 4% in 2005 with job gains of 150,000 to 200,000 a month. "If the economy evolves as I expect over the next year or so ... then I expect we will continue to move the federal funds rate toward neutrality at a measured pace," Santomero said to a Philadelphia group. Santomero reiterated that if signs of price pressures emerge on a "consistent basis" the Fed will need to consider quickening the pace of interest rate increases. Santomero also said he expected not only growth in jobs, but greater expansion in higher-paying jobs, based on new research by the Philadelphia bank. Gary Stern, president of the Federal Reserve Bank of Minneapolis, told a business group that, "I don't see factors that lead me to believe there will be an appreciable acceleration of (core) inflation in 2005." Stern said the low interest rates did not appear to be spurring excessive risk-taking in the markets. usatoday.com