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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Eddie D. Gilbert who wrote (124)	3/8/1998 7:09:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

Thank you, Eddie. The new economy is planned, wish it is all my ideas. But accurate analysis is posted here. Information is always condensed, so it maybe hard to read. Interest rate has to be held tight. It was experimented lower enough to compete with Japan. But to have the interest rate to provide economic growth, it has to be 6.5% to end users. FEDS' rate tightened last year caused the current liquidity crunch around the world. The economy around the world is very much influenced by our economy. We are going to be $10 trillion economy. Japan's $4 trillion economy is mostly exporting to America. $45 billion+ in direct export of cars, not counting electronics exports, multiple by 9 for domestic economy benefited by those exports. Export should be down to 10% of domestic economy including the 9 times multiples. Then Japan's economy will not be severely effected by foreign economy policies. So, with interest rate steady, FEDS will provide a monetary policy which controls liquidity (credit) by bank reserves. We should be able to benefit from the earnings which the modest interest rates will provide for the growth of this country. Wall street's thinking of low low interest is bad for our economic growth. Just look at Japan, they are not our shinning example for a robust economy and the standard of living in some quarters are way too low. Interest rate when it goes up tightens liquidity; but when it goes down does not provide liquidity. All factors are controlled but the most significant factor is our productivity. Liquidity, interest rate all have to take a back seat. Liquidity has to be provided for just so much more productivity; then we do not have inflation. Productivity controls inflation by providing more supplies at reasonable cost. However, higher standard of living, when we buy higher quality goods, is not considered inflation. We can afford it, it is our choice. When credit cards charge 20%, all their customers go bankrupt after a while. In the old days, Mafia charges high interest rates; high enough to have all their customers ended in the river. Congress can take this home to reform the personal bankruptcy laws.