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To: Sergio R. Mejia who wrote (5874)	1/14/1998 6:58:00 PM
From: PaulM	Respond to of 116764

Sergio,Japan is what America was in the 1920's: the world's economic engine of growth. Their bubble was bigger than ours, and so must be the burst. The U.S. remains in a long term period of decline. Its benefitting from very peculiar factors right now: a meltdown in the east and ecu in Europe. It shouldn't bother us Americans so much if all the opportiunities won't be here forever because the individual can always look elsewhere to invest.

To: Sergio R. Mejia who wrote (5874)	1/14/1998 7:43:00 PM
From: Gabriela Neri	Read Replies (2) \| Respond to of 116764

Its obvious that the only way out of the dilemma is to allow inflationary forces to go unchecked in the US, leaving interest rates unchanged even if the US economy continues to grow at 3.5-4.0%. Allowing some inflation back into the equation is clearly the lesser of the two evils, given the precarious state of the global economy. There is no way Greenspan is going to put the brakes on the only economic engine pulling the rest of the world. He would be killing the Goose with the golden eggs. The engines of growth will be allowed to purr with more inflation tolerance than before the asisn crisis. That is what US policy makers will conclude, especially the democratic liberals who have their man in office. Inflation is going to become a populust policy choice with little risk politically. Greenspan doesnt even have the choice currently of raising rates, whether or not we have tight labor markets or high capacity utilization, or Phllips curve implications or not. Events outside our borders are going to dictate to him what monetary policy is for the time being.