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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (2459)	3/1/1998 7:49:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 9980

Tommaso:When M3 is increasing at 11% and M1 at 4% here in the U.S as you aptly points out, may I ask you the reasoning behind your postulation that 'U.S financial authorities to anticipate a contraction of equity values to prevent it from going too far'? How would you envision this 'financial authorities' to accomplish this task? Could it be by increasing the interest rates? If so how do they justify a rate increase if the rate of inflation is modest and the rate of growth of the U.S economy is moderate (say less than 3%) ? Unless of course Greenspan comes out with another 'irrational exuberance' speech, then he can certainly put a lid on any expansion in equity values,though the effect may be temporary. Any thoughts will be appreciated.