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To: werefrog who wrote (10839)	12/11/1997 10:01:00 AM
From: hpeace	Read Replies (1) \| Respond to of 97611

james, that was not the consenus of the fed... you cannot post that from anywhere. the fed actually said that the exchange rate issue might allow them to lower rates since assian exchange rate problems lower our inflation. the talk out of fed from board memebers were that the asain issue might no increase in dec. and maybe a drop of rates in 1q98. this is really eco 101. Also, Stedman the ex head of fomc has been on cnbc 2 or 3 imes with the asain issue could mena a drop in rates. IN SHORT...THE ASIAN FLU WORKS ON INTEREST RATES THE OTHER WAY. I can post you numerous articles from fed memebers that talked about this... there are several international macro-eco laws that allow this. the asian exchange rates amay make things sluggish here and lowering rates would pick them up. the other is their problem lowers our inflation even more.

To: werefrog who wrote (10839)	12/11/1997 12:08:00 PM
From: ed	Read Replies (1) \| Respond to of 97611

I think you probably need to take more economics courses and dijest . When you read on the article that FED will raise the rate in 1stq of 98, did you think twice what is the purpose for FED to raise the rate in current environment? To reduce the inflation pressure ? Am I right? I think you probably agree. The question now is there inflation pressure under the current economic environment ? 1) Most Asian currency depreciated significantly against the Dollar. This will further reduce the inflation pressure in US, and make things cheaper, especially the consumer's products. This is why CPQ DELL, IBM HWP those box maker had room to cut price and still enjoy a good profit margin, because their cost on the parts are much lower. As a result of price cut, the market is expanded significantly.So you already see deflation effect in the PC business,and those effects are good for the box makers. However , those effects are not so good for GM, F, C when they face the cheaper imported cars from Japan and Korea in the US market. Conclusion: No inflation pressure in US but deflation. 2) Korea, Thai, ...etc is in serous short of foreign reserve, the hike of rate in US will attract more of local capital flowing to the US market to further kill the economy locally and as a result will have negative impact to the US exporters in general. 3) What if FED decided to hike the rate ? a) The US economy will slow down, and have less potential to dijest the cheap import from S.E Asia. b) The cost for the US companies to borrow capital will be higher which willt further degrade the capability of US corps to compete in the international market, not mention the currency effect. c) As S.E. Asia had no place to export their cheap goods in exchange for hardly needed dollars, this will further degrade the local economy and will further hurt the US economy. So, now it is the time to reduce rate not increase. If FED wants to kill the world economy and make headed to a global depression, now it is the time , i.e Hike the rate in 1 q of 98.

To: werefrog who wrote (10839)	12/11/1997 2:19:00 PM
From: hpeace	Read Replies (2) \| Respond to of 97611

james, where you are getting the myth of the interest rate hikes is not from the fomc...they are talking rate declines in 1q98 if htis continues... and absolutely no rate hike in dec. It's easy to get this nyth fomr the ignorant press.. Greenspan actually articualted that the unemployment number that is extremely low hasn't been inflationary becasue of prodcutivity increases. and greenspan also says that inflation is really 1+% right now and they don't use the b. of stat numbers becasue their basket on what they measure is not modern. they use stats out of uNiv. of Chicago for that. those guys are savey.. I think Freidmen is there or still influencing their eco dept. By the way...my profession is MIS and manufacturing but I also almost have a PhD in Eco and minor in econometrics from the 12th ranked eco dept. in the USA at the time. MAny of my professors studied under Freidman and Fergerson. several of my professors you know... Phil Gramm and Wendy Gramm<ggg>