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

To: THE ANT who wrote (29099)	5/1/2005 4:16:50 PM
From: RealMuLan	Respond to of 116555

>>As they raise rates the battle lines draw nearer to a war they know they will lose.<< I read some Chinese are speculating that next year the US will launch a financial war with China. And to increase the gap of the interest rate bet. the two countries is the first step<g>

To: THE ANT who wrote (29099)	5/1/2005 5:52:56 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 116555

You are most likely correct. Greenspan had to choose between all out crash and the potential for muddle-through. He obviously chose the latter. He allowed companies to refinance and build their war chests. The housing speculation was a consequence and will now be dealt with. I don't think the Fed gives a hoot about over-leveraged homeowners and will continue to raise rates to beat inflation. The goal in 2000 was to keep American companies competitive and at least semi-solvent so that they could continue when the economy really does nosedive. In this respect, I admit they succeeded. Where I feel the Fed's failure could possibly come is in their allowing to let the financial sector become such a big proportion of the Economy. The Achilles heel of every deflationary economy is loss of faith in the banking sector. The seeds are planted for a financial disaster and then all the Fed will have done was postponed and worsened the day of reckoning. ALL IMHO.

To: THE ANT who wrote (29099)	5/1/2005 6:08:07 PM
From: NOW	Respond to of 116555

"The question they must be asking themselves is whether avoiding the loses of an overshoot to the downside was worth the loses from capital misallocation" I dont think they give a rats ass about this...your first observation wwas much more cogent: have they bought sufficient time for their inside friends to offload worthless paper to the unsuspecting masses setting up offshore accounts and by and large getting away with the largest transfer of welath scheme in the history of the planet....nothing more. they could care less about repercussions. anyone who doubts this needs their head examined.