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To: Mike Johnston who wrote (1439)	10/5/2007 1:41:46 PM
From: SouthFloridaGuy	Respond to of 1718

Rates are pretty much where they should be given where economic growth is. 2% real GDP, 2% real rates, makes sense. As I have said before, It doesn't matter what you think inflation is, it matters what the market thinks (as is mentioned in the Mission Statement). The Fed can't control what Asia wants to do with their excess money. So long as market based measures of inflation are in-line - and they are for the most part - the Fed should worry about US growth. If Asian inflation spills over here and/or US growth is out of line, then we should worry. I've said this before, we're getting a free-pass for this housing thing as it could be much worse.

To: Mike Johnston who wrote (1439)	10/5/2007 7:06:09 PM
From: ggersh	Read Replies (1) \| Respond to of 1718

" I have been waiting for higher rates too. But it is not happening due to Central Bank intervention in the bond market. Unusually low rates are and will be the drivers of inflation and in the future possibly hyperinflation. With 14% and rising ( possibly pushing high teens after last round of CB activism )annual monetary inflation and price inflation close to 10%, long term rates should be at least a double current level, in order to reflect true level of inflation in the economy" My belief is that rates will go up from here. I have two premises fot that, first being creation of the Soveriegn funds will mean less buying of treasuries, and the second being the CB and this Govt. dont care about the dollar. As long as the statistics are being concocted with we will never know the true measure of inflation. I believe we are the only country not experiencing inflation. With the almighty Dollar figure that one out. FWIW